Manila: The Philippine government has announced a funding strategy to fulfill its commitments under the Comprehensive Automotive Resurgence Strategy (CARS) Program, despite the veto of a PHP4.32-billion fiscal support item in the proposed 2026 General Appropriations Act (GAA).
According to Philippines News Agency, the Department of Budget and Management (DBM), Department of Trade and Industry (DTI), and Department of Finance (DOF) issued a joint statement ensuring that the veto does not indicate a policy change regarding the automotive sector, which remains a priority for the Marcos administration.
DBM Acting Secretary Rolly Toledo emphasized the government's unwavering support for the auto industry, stating that obligations backed by issued and validated Tax Payment Certificates (TPCs) will be settled responsibly and legally, adhering to fiscal constraints and budgetary rules.
The CARS Program, initiated in 2015, seeks to establish the Philippines as a regional hub for automotive manufacturing through incentives based on production targets. Concerns were raised when President Ferdinand R. Marcos Jr. vetoed a PHP92.5 billion budget item, including the PHP4.32-billion support for the CARS Program.
The government clarified that while fiscal support arrearages for the CARS Program were excluded from the FY 2026 GAA, existing budgetary provisions under the FY 2025 GAA will address valid obligations. This includes the operational needs of the CARS Program Project Management Office and the fiscal support arrearages under the DTI-Board of Investments budget, which may be supplemented using declared savings from the Department of Public Works and Highways, pending constitutional and legal approval.
Based on validated TPCs, the government assured its ability to meet dues to participating manufacturers like Toyota and Mitsubishi and eligible auto parts makers using FY 2025 savings. Unmet validated requirements may be considered for the FY 2027 National Expenditure Program, depending on cash programming and fiscal space.
DTI Secretary Cristina Roque highlighted the importance of continued government backing for maintaining investor confidence, acknowledging the automotive industry's critical role in job creation, technological advancement, and industrial growth. Roque affirmed the government's commitment to maintaining incentives under the CARS Program to attract investors.
Finance Secretary Frederick Go reiterated President Marcos Jr.'s directive to honor government commitments to investors. The agencies emphasized the ongoing validation of TPCs, with the DTI ensuring claims are accurate and compliant before fund release.
