‘CARS, RACE funding veto to put jobs at risk, weaken auto growth’

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January 15, 2026 | 12:00am

MANILA, Philippines —  The government’s decision to veto the funding for programs to incentivize local vehicle manufacturing is seen to threaten jobs and weaken long-term economic growth, according to the Philippine Metalworkers’ Alliance.

PMA national president Narciso Lozano Jr. said “defunding CARS (Comprehensive Automotive Resurgence Strategy) and RACE (Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) sends a dangerous signal that the government is retreating from industrial development and decent job creation.”

“This is not just a budget issue. It is a policy issue,” Lozano said in a statement yesterday.

Earlier this month, President Marcos vetoed P92.5 billion in unprogrammed appropriations in this year’s budget. The vetoed items include the P4.32 billion funding for the CARS program and P250 million for the RACE program.

Under the CARS program, the government promised to provide incentives to encourage investments in local vehicle manufacturing.

Meanwhile, RACE was being designed to serve as the CARS’ successor program.

PMA warned that the removal of the funding for both programs would put jobs in the automotive sector at risk.

According to the Board of Investments, the automotive manufacturing sector directly employs around 8,000 workers, while an estimated 340,000 workers depend on auto parts, metalworking, electronics, logistics and other supporting industries.

“These are skilled, productive and relatively well-paid manufacturing jobs,” Lozano said.

“Weakening the automotive industry weakens the entire manufacturing ecosystem,” he added.

PMA also emphasized the sector’s economic importance through its contributions in terms of national output through value-added production, exports and technology transfer.

“You cannot expect stronger growth in 2026 while dismantling one of the country’s major value-producing industries,” Lozano said.

PMA also pointed out the contradiction between defunding domestic manufacturing programs and allowing tariff-free entry of imported electric vehicles (EVs) and spare parts, which puts local producers at a disadvantage.

“If the government is serious about inclusive growth and decent work, it must support – not abandon – industries that create them,” Lozano said.

The group urged Marcos to immediately restore funding for the CARS and RACE programs and treat them as core elements of national industrial policy.

“Restoring and strengthening these programs is essential to protecting jobs, sustaining growth and securing the country’s industrial future,” the PMA said.

The EV Association of the Philippines (EVAP) is also calling on the government to reinstate funding for the CARS and RACE, noting that a strong domestic automotive manufacturing base is needed for the growth of EVs.

“Supporting CARS and RACE today strengthens our ability to assemble EVs locally tomorrow,” EVAP president Edmund Araga said.

“If we want Philippine-made EVs in the future, we must first protect and grow Philippine automotive manufacturing today,” Araga added.

Meanwhile, Budget Secretary Rolando Toledo said the budget and trade departments are scheduled to meet to discuss the vetoed unprogrammed appropriations for the CARS and RACE programs.