New perks for carmakers being finalized
The government’s new incentive program for automotive vehicle manufacturers is now awaiting inputs from two more government agencies, inching closer to its final approval and potential rollout in the coming months.
Board of Investments Manufacturing Industries Service Acting Director Ronaldo Buluran said last week that feedback from the Department of Budget and Management (DBM) and the Department of Finance (DOF) would move the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program to the next phase of finalization.
“We’re awaiting comments, after which we’ll finalize the draft,” Buluran said in a message sent to the Inquirer.
“First quarter of 2025 is the original timeline so we’re closely following up with DBM and DOF,” he added.
Fiscal support
According to Buluran, fiscal support under the RACE Program would be limited to fixed investment support (FIS), which covers up to 40 percent of capital expenditures.
He emphasized that unlike the Comprehensive Automotive Resurgence Strategy (CARS) program, it would not offer a production volume incentive.
However, to qualify for the FIS, manufacturers must meet specific production targets. The first tranche requires the production of at least 1,000 units.
For the second tranche, manufacturers must produce additional 10,000 units, followed by another 10,000 units for the third tranche, bringing the total to 21,000 units.
The old program
Prior to the new program, the government introduced the CARS program in 2015, a P27-billion incentive initiative aimed at supporting local automotive manufacturers.
The program drew participation from two major companies: Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp., the local arms of two of Japan’s biggest car brands.
As part of the agreement, both companies were required to locally manufacture 200,000 units each of the Toyota Vios and Mitsubishi Mirage models within six years of start of production in 2018 to qualify for the tax incentives.
