DBM says CARS participants will not be abandoned

ACTING Budget Secretary Rolando U. Toledo said automakers registered with the Comprehensive Automotive Resurgence Strategy (CARS) program will receive incentive funds that were thrown into uncertainty by a Presidential veto.

“The government’s position is clear: we will not abandon the auto industry,” Mr. Toledo said in a joint statement with the departments of Trade and Industry and Finance.

The CARS program offered car manufacturers support for fixed investment and incentives triggered by meeting production thresholds.

The departments said obligations under the CARS program will be settled by augmenting a fiscal support arrearages line item in the Board of Investments (BoI) 2025 budget.

The funds to augment the fiscal support were sourced from savings generated by the Department of Public Works and Highways (DPWH).

The fresh funds will support the operating requirements of the Project Management Office of the CARS program and the fiscal support arrearages, they said.

President Ferdinand R. Marcos, Jr. vetoed unprogrammed appropriations in the 2026 budget, including the P4.3‑billion allocation for the CARS program.

The departments said the veto does not “reflect a withdrawal of government support for the auto industry” as existing budgetary items in the 2025 budget remain available to meet the program’s obligations.

As a result, the government can pay what it owes to CARS participants Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp., and to qualified auto parts makers, based on the validated tax payment certificates (TPCs), the departments said.

“We will ensure that the government maintains a clear and responsible course in settling obligations and supporting the auto industry, always in accordance with the law and the capacity of public funds,” Mr. Toledo said.

Restoration of funding for the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) remains unresolved.

The government said that if validated requirements are not covered under the current spending plan, they can be considered for the 2027 National Expenditure Program.

In addition, the agencies said validation is still ongoing, with the DTI verifying if the claims are accurate and compliant with program guidelines.

Trade Secretary Cristina A. Roque said the government remains committed to ensuring that incentives will continue to encourage investors to do business in the Philippines.

“The industry can expect continued partnership to ensure that the program is implemented in line with its intended objectives,” she said.

The program offers incentives to automakers to produce 200,000 units of mass-market car models over six years in the Philippines.

Finance Secretary Frederick D. Go said Mr. Marcos gave clear direction that the government should honor commitments to investors.

“Our message to the auto industry is clear: do not worry — you remain part of the government’s long-term plan for industrial development, jobs creation, and economic growth,” he said.

He also promised that legitimate obligations will be paid, consistent with the law, and within the capacity of public funds. — Aubrey Rose A. Inosante