Gov’t shares ‘new’ funding solution for CARS program amid PBBM veto

MANILA: The national government has the capacity to settle its automotive industry -related obligations amid the vetoing of the Comprehensive Automotive Resurgence Strategy (CARS) Program item in the 2026 General Appropriations Act (GAA).

In a joint statement, the Department of Budget and Management (DBM), Department of Trade and Industry (DTI), and the Department of Finance (DOF) disclosed that the allocation for the program will come from the savings of the Department of Public Works and Highways last year instead of the P4.32-billion fiscal support proposed under unprogrammed appropriations.

Based on the Tax Payment Certificates (TPC) already issued and validated, the government has the capacity to settle dues to participating car manufacturers such as Toyota and Mitsubishi — as well as eligible automotive parts manufacturers.

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Further, any remaining validated requirements that have not yet been issued TPC, and are not covered under the current GAA, may be considered for inclusion in the proposed FY2027 National Expenditure Program (NEP) — which could be subjected to cash programming.

Such an approach, the three agencies claimed, reflects a careful balance between supporting the auto industry, upholding due process, and ensuring responsible stewardship of public funds.

“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 Rolly Toledo said.

For her part, DTI Secretary Cristina Roque highlighted the significance of sustained collaboration between government and automotive manufacturers and investors.

“The government recognizes the automotive industry’s vital role in job creation, technology development, and industrial growth. We are committed to ensuring that the incentives under the CARS Program 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 explained.

Lastly, Finance Secretary Frederick Go reaffirmed the administration’s commitment to honoring its obligations under the CARS Program.

“President Ferdinand Marcos, Jr. has given clear direction that the government must honor the commitments it made to investors who placed their trust in the Philippines. 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,” the former Special Assistant to the President on Investments and Economic Affairs said.

“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 added.

Stakeholders welcome solution

Meanwhile, concerned organizations — Chamber of Automotive Manufacturers of the Philippines, Incorporated (CAMPI) and the Philippine Parts Makers Association (PPMA) — welcomed the latest development regarding the incentive-related funding issue.

Per CAMPI, the announcement “gives renewed confidence in the industrial policy and puts the automotive sector back on track for long-term investment planning.”

On the other hand, PPMA looks at the funding solution as a vital step in “sustaining investor confidence and reaffirming the government’s commitment to revitalizing domestic automotive manufacturing.”

Relatedly, both CAMPI and PPMA expressed hope in the implementation of the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) Program.

Prior to the approval for this year's budget, the country's chief executive vetoed the allocations intended for CARS and RACE programs.

Also read:

PH EV group seeks CARS, RACE funding reinstatement

CAMPI airs concern on CARS, RACE funding veto

PH auto parts makers group raises concern on CARS, RACE budget removal in 2026 GAA

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