Auto parts makers seek 2nd chance for cars, race funds
Vehicle parts manufacturers are seeking a dialogue with lawmakers after President Marcos vetoed funding for two major incentive programs in the 2026 budget.
These perks were intended to revitalize the local automotive industry. In particular, the veto removed unprogrammed funds for the Comprehensive Automotive Resurgence Strategy (Cars) and the Revitalizing the Automotive Industry for Competitiveness Enhancement (Race) programs.
Cars had been allocated P4.32 billion, while Race was set to receive P250 million.
The amount was intended to support Cars’ outstanding obligations under its P27-billion incentives program, which grants tax payment certificates to participating carmakers.
The allocation was also meant to fund Race, which is designed to provide up to P3 billion in support to manufacturers.
In a statement on Wednesday, the Philippine Parts Makers Association (PPMA) said it is seeking discussions with Congress to explain the role of the programs in sustaining the local automotive industry.
“The auto industry is ready to sit down with our legislators to educate them on how Cars and Race drive jobs, investments and long-term industrial resilience. This is about building a competitive manufacturing base for the country,” said PPMA president Ferdi Raquelsantos.
Raquelsantos said the programs are “critical lifelines” for vehicle and auto parts manufacturers.
“The Philippine auto parts industry needs Cars and Race to survive,” he added. “Without sustained and predictable government support, local manufacturers will continue to lose ground, investments will slow, and skilled jobs will disappear.”
The PPMA said government support is increasingly needed as the Philippines lags further behind its Southeast Asian neighbors in automotive manufacturing.
Vehicle sales in the Philippines reached 420,776 units as of November, based on joint data released by the Chamber of Automotive Manufacturers of the Philippines, Inc. and the Truck Manufacturers Association.
By contrast, Thailand produces more than 2 million vehicles annually, while Indonesia and Vietnam are expanding both conventional and electric vehicle manufacturing, the group said.
“Automotive manufacturing has always been a cornerstone industry in Southeast Asia,” Raquelsantos said. “If we allow our ecosystem to weaken further, it will be extremely difficult to recover.”
Trade Undersecretary Ceferino Rodolfo earlier said the government was working to ensure that pending obligations to carmakers under the Cars program would still be settled despite the veto.
“To our investors, we firmly assure that we are already working with other Agencies, principally the DBM (Department of Budget and Management), 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,” Rodolfo said on Monday, when Marcos signed the 2026 budget.
