Gov't assures Toyota, Mitsubishi of incentive payments

January 19, 2026 | 1:12pm

MANILA, Philippines — The government has not withdrawn support from the automotive industry and will settle outstanding obligations to car manufacturers Toyota and Mitsubishi, the Department of Budget and Management said on Monday, January 19.

The statement followed President Ferdinand Marcos Jr.'s veto of two automotive industry programs in the proposed 2026 national budget that grant tax benefits to manufacturers.

Senate Finance Committee Chair Win Gatchalian earlier raised concerns that the government might be unable to honor tax incentives under the Comprehensive Automotive Resurgence Strategy (CARS) and the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) programs.

The DBM, in a joint statement with the Department of Trade and Industry, and the Department of Finance, said the budget veto does not signal a policy reversal or withdrawal of support for the automotive sector.

Funding for CARS and RACE has already been provided under the 2025 General Appropriations Act, the DBM said. These budget allotments are sourced from savings of the DTI–Board of Investments and the Department of Public Works and Highways.

"Based on the Tax Payment Certificates (TPCs) already issued and validated, the government has the capacity to settle dues to participating car manufacturers, including Toyota and Mitsubishi, as well as eligible autoparts makers," the DBM said.

"These payments will be supported by available FY 2025 savings, subject to the approval of the Office of the President and compliance with all applicable fiscal and legal requirements," it added.

Payments, future funding

The DBM said obligations not covered by issued TPCs may be proposed in the 2027 National Expenditure Program.

"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," Budget Secretary Rolly Toledo said.

Finance Secretary Frederick Go said Marcos has directed agencies to maintain the country's commitments 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," Go said.

Trending

Recommended