A long-awaited financial resolution is on the horizon for automotive manufacturers in the Philippines. The government is preparing to fulfill its commitments to companies that participated in the Comprehensive Automotive Resurgence Strategy (CARS) program, with full repayment anticipated by the end of next year.
Undersecretary Ceferino Rodolfo of the Department of Trade and Industry confirmed the resumption of issuing tax payment certificates, signaling a concrete step towards settling outstanding obligations. This move follows a period of uncertainty regarding the program’s funding and represents a significant relief for the involved businesses.
The funds for these repayments will be sourced from savings within the Department of Public Works and Highways’ 2025 budget, demonstrating a strategic reallocation of resources to honor prior commitments. This decision underscores the government’s dedication to supporting the automotive industry, despite recent budgetary adjustments.
Earlier this year, a substantial portion of unprogrammed appropriations earmarked for CARS – over 4.32 billion pesos – was vetoed from the 2026 budget. However, a plan was swiftly put in place to address this shortfall and ensure the program’s financial obligations are met.
Key players awaiting these payments include industry giants Toyota Motor Philippines and Mitsubishi Motors Philippines, alongside a network of crucial automotive parts suppliers. The timely disbursement of these funds is vital for these companies to continue investing in local manufacturing and innovation.
Any remaining validated claims not covered by the 2026 budget are slated for consideration in the proposed 2027 national budget. This ensures a continued pathway for full reimbursement, subject to careful cash programming to guarantee timely settlement.
The CARS program, initiated in 2015 through Executive Order No. 182, was designed to stimulate and incentivize domestic vehicle production. It offered fiscal support to companies achieving significant production milestones – specifically, manufacturing at least 200,000 units of an approved vehicle model within a six-year timeframe.
Toyota’s popular Vios sedan and Mitsubishi’s Mirage hatchback and Mirage G4 sedan were among the models that qualified under the program, benefiting from the incentives designed to bolster local automotive manufacturing capabilities. The program aimed to establish the Philippines as a regional hub for vehicle production.
