CAMPI: Review vetoed funds for RACE, CARS programs
Given the chaos that the 2025 General Appropriations Act (GAA) created (particularly by anomalous flood-control projects), the government is understably more careful with this year’s national budget.
When President Ferdinand Marcos Jr. signed the P6.793-trillion 2026 GAA into law on Monday, he vetoed P92.5 billion of unprogrammed funds – these included P4.32 billion allocated for the Comprehensive Automotive Resurgence Strategy (CARS) Program and P250 million for the upcoming Revitalizing the Automotive Industry for Competitive Enhancement (RACE) scheme.
The country’s largest group of automotive manufacturers and importers is calling for a review of this veto, in light of the harm it could bring to the local car industry.
“Both CARS and RACE are fundamental programs that contribute to the overall industrial development of the country,” the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) said in a statement this month.
“We fully trust and support efforts of key government agencies in urgently resolving these important matters,” it added.
Pinoy-made
The CARS Program was enacted through Executive Order 182 in May 2015 by the late former President Benigno Aquino III.
Under the scheme, the government offered P9 billion each in incentives to three car companies that could locally produce 200,000 units from 2018 to 2024. This includes manufacturing the majority of the parts in the Philippines.
Toyota Motor Philippines (TMP) fielded its best-selling Vios subcompact sedan, while Mitsubishi Motors Philippines Corporation (MMPC) entered its Mirage hatchback and Mirage G4 sedan.
The government was expected to earn a net revenue of P18.77 billion in income taxes, value-added taxes and withholding tax payments. But following the global economic slowdown caused by the COVID-19 pandemic, President Marcos Jr. approved the five-year extension of the program in 2023.
The vetoed funds in the 2026 GAA were intended to support the government’s outstanding obligations to TMP and MMPC.
“Recent developments have raised serious concerns on the funding for the financial incentive commitments granted under the Comprehensive Automotive Resurgence Strategy Program,” CAMPI said. “The participants should be able to receive their incentives based on their actual performance that already generated economic benefits.”
Shaky future
Meanwhile, RACE plans to offer up to P3 billion each in incentives to three automotive manufacturers that could produce 100,000 internal-combustion-engine vehicles locally, with the enrolled model being introduced to the Philippine market within two years of acceptance.
Trade Secretary Maria Cristina Roque said last January 2025 that RACE would be a “government initiative that incentivizes the development of energy-efficient and eco-friendly vehicles.” Board of Investments executive director Ma. Corazon Halili-Dichosa said in February last year that TMP and MMPC had already signified their intention to join the scheme.
For easier implementation, a Joint Administrative Order for RACE by the Department of Trade and Industry, the Department of Finance and the Department of Budget and Management (DBM) had been slated for release last March 2025, but none has been made publicly available as of press time.
“The Revitalizing the Automotive Industry for Competitiveness Enhancement Program is an important transition to future industry development programs and should be implemented soon,” CAMPI said.
Gov’t will settle
CAMPI stressed the importance of collaboration between the government and private industry to secure the future viability of the Philippine auto manufacturing sector.
“Such is crucial in creating a positive environment for future investments and help develop a more robust local Auto Parts Manufacturing Industry,” the group said.
Meanwhile, Trade Undersecretary Ceferino Rodolfo said on Monday that the government is working to ensure that pending obligations under the CARS Program would be settled, despite the veto.
“To our investors, we firmly assure that we are already working with other agencies, principally the DBM, in identifying a mechanism to ensure payment of CARS arrearages, especially as these had been based on validated delivery of performance commitments and on a robust and transparent interagency process of vetting claims against the CARS Program,” he said.
