‘CARS incentives to be funded from DPWH budget savings’

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January 20, 2026 | 12:00am

MANILA, Philippines — The government yesterday assured investors it would settle incentives under the Comprehensive Automotive Resurgence Strategy (CARS) Program with savings from the Department of Public Works and Highways’ (DPWH) budget last year as the funding source.

In a joint statement yesterday, the Department of Budget and Management (DBM), Department of Trade and Industry (DTI) and Department of Finance (DOF) said that existing budgetary items under the programmed appropriations of the 2025 General Appropriations Act (GAA) remain available to settle valid obligations under the CARS program.

Earlier this month, President Marcos vetoed the P4.32-billion allocation for the CARS program under this year’s budget.

“While the fiscal support arrearages item is no longer included in the FY (Fiscal Year) 2026 GAA, the government retains the ability to settle validated obligations through the augmentation of the existing fiscal support arrearages line item under the DTI-BOI (Board of Investments) Budget in the FY 2025 GAA from the FY 2025 declared and verified savings of the DPWH, in accordance with the Constitution, existing laws, applicable budgetary rules and regulations and the approval of the President,” the agencies said in the joint statement.

Based on the tax payment certificates (TPCs) already issued and validated, the agencies said that the government has the capacity to settle dues to CARS’ participants Toyota Motor Philippines Corp. (TMP) and Mitsubishi Motors Philippines Corp. (MMPC), as well as eligible autoparts makers.

As for remaining validated requirements that have not yet been issued TPCs and not covered under the current GAA, the agencies said these may be considered for inclusion in the proposed FY 2027 National Expenditure Program (NEP).

Should these be included in the FY 2027 NEP, they will be subjected to cash programming to ensure the settlement of government obligations, consistent with available fiscal space.

The CARS program was launched in 2015 to encourage investments in local vehicle manufacturing by providing incentives.

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

The incentives are provided through TPCs issued by the BOI.

Participating car manufacturers and parts makers can use the TPCs for taxes and duties on their imports.

“The government’s position is clear: we will not abandon the auto industry. Obligations supported by issued and validated TPCs will be paid in a legal, orderly and responsible manner, consistent with our fiscal space and established budgetary rules,”DBM Secretary Rolando Toledo said.

DOF Secretary Frederick Go said that the President has given a clear direction to the government to honor the commitments it made to investors.

“The CARS program is a key pillar of our strategy to strengthen local manufacturing, and we will ensure that legitimate obligations are paid — consistent with the law and within the capacity of public funds,” he said.

For its part, TMP welcomed the Philippine government’s clarification on its fiscal means and commitment to honor its obligations under the CARS program.

“TMP sincerely appreciates the government’s decisive action to reassure investors and stakeholders who have long supported the Philippine automotive manufacturing industry. This move reinforces confidence in the country as a sustainable base for automotive manufacturing,” TMP said.

It also said it remains committed to working with the government in revitalizing the Philippine automotive industry.

The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) said the government’s recent move gives renewed confidence in the country’s industrial policy and puts the automotive sector back on track for long-term investment planning.

“CAMPI and its members look forward to the implementation of the Revitalizing the Automotive Industry for Competitiveness Enchancement (RACE) program, which will be instrumental in industry recovery and growth,” the group said.