‘CARS funding fix to boost investor confidence’

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January 21, 2026 | 12:00am

MANILA, Philippines — The country’s automotive parts makers and the umbrella group of manufacturers welcomed the government’s move to find a funding solution for its vehicle manufacturing incentive program, citing its importance to sustaining investor confidence and policy stability.

Philippine Parts Makers Association (PPMA) president Ferdinand Raquelsantos said that the government’s announcement that it has finalized a funding solution for the Comprehensive Automotive Resurgence Strategy (CARS) program is an important step in sustaining investor confidence and reaffirming the government’s commitment to revitalizing local automotive manufacturing.

Last Friday, Finance Secretary Frederick Go said the CARS program would be funded after President Marcos vetoed its allocation in this year’s budget.

Raquelsantos said the P4.32 billion allocation for CARS is vital in supporting the continued operations and production plans of the program’s participants, including vehicle manufacturers and their local suppliers.

“This resolution strengthens policy stability, protects jobs and helps preserve the manufacturing ecosystem that the Philippines has worked hard to build over the years,” he said.

Launched in 2015, the CARS program was aimed at attracting investments in local vehicle manufacturing by providing incentives.

Under the program, the government will provide fiscal support to automotive firms that produce at least 200,000 units of their enrolled vehicle model within six years.

Federation of Philippine Industries chair Elizabeth Lee said in a Viber message that the group also views the government’s move to secure funding for the CARS program as a positive development and vital step in rebuilding investor confidence and honoring commitments to manufacturers.

She said automotive manufacturing goes beyond vehicles by providing jobs, enabling technology transfer and promoting the local parts industry’s growth.

“Policy consistency is the true cornerstone of competitiveness and we call on government agencies to turn bold pronouncements into timely, transparent action,” she said.

“Only by sustaining industrial programs with credibility can the Philippines position itself as a trusted destination for long-term manufacturing investments,” she said further.

PPMA also expressed hope that the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program, designed to be the CARS’ successor program, will be implemented soon.

“We underscore that only P125 million is needed to initiate and operationalize RACE, an amount that can unlock significant benefits for the broader industry, especially for local automotive parts manufacturers who are key contributors to inclusive industrial growth,” Raquelsantos said.

For the PPMA, the RACE program is expected to help strengthen the domestic supply chain by supporting investments in tooling, technology upgrades, quality and safety certifications, productivity improvements and local content expansion.

In addition, the RACE is expected to enable more Filipino parts makers to participate in local vehicle production and compete within the Southeast Asian region.

PPMA also underscored the importance of the upcoming Electric Vehicle Incentive Strategy program, which aims to encourage the local production of EVs, batteries, motors and components, as well the deployment of charging stations and testing facilities through the grant of incentives.

Raquelsantos said Philippine manufacturers could support EVs by supplying wiring harnesses, stamped and structural parts, body components, electronics housings, thermal systems and eventually power electronics and battery-related components.