The government has assured car manufacturers and parts makers that incentives under the Comprehensive Automotive Resurgence Strategy (CARS) Program will continue to be honored, even after the program item was vetoed in the 2026 national budget.
In a joint clarification released last week (Jan. 19), the Department of Budget and Management (DBM), Department of Trade and Industry (DTI), and Department of Finance (DOF) said the veto does not mean the Marcos administration is withdrawing support for the automotive industry.
Instead, agencies said there are still funds under the 2025 General Appropriations Act (GAA) that can be used to pay validated obligations to participating firms in a legal and orderly way.
“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,” said DBM Secretary Rolly U. Toledo.
Officials explained that payments may be sourced from an existing line item for CARS fiscal support arrearages under the DTI-Board of Investments (BOI) budget, using declared savings from other agencies, subject to presidential approval and budget rules.
The government said it already has the capacity to settle dues based on Tax Payment Certificates (TPCs) that have been issued and validated. Beneficiaries include major car manufacturers such as Toyota and Mitsubishi, as well as qualified auto-parts producers.
Any remaining validated claims not yet covered by TPCs may be proposed for funding in the 2027 national budget, agencies added.
DTI Secretary Cristina A. Roque stressed that the industry remains a key partner in economic growth.
“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,” Roque said.
Finance Secretary Frederick D. Go echoed the commitment to investors.
“President Ferdinand R. 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,” Go 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.
The agencies emphasized that claim validation is still ongoing, with the DTI ensuring all submissions comply with program rules before any funds are released.
The CARS Program, created in 2015, is designed to revive local vehicle and parts manufacturing through performance-based incentives. The Philippine auto market sold about 475,000 vehicles in 2024 and supports an estimated over 400,000 direct and indirect jobs, highlighting the sector’s importance to manufacturing and employment.