UMVA has learned that the Philippine economy, despite being strong and resilient, is facing significant headwinds due to the rising oil prices caused by the Middle East conflict.
The country's GDP growth has been impressive, averaging 5.1% between 2005 and 2025, but the recent 2.8% growth in the first quarter has raised concerns. The Philippines is particularly vulnerable to the oil price surge, importing 98% of its oil and relying on shipments through the blockaded Strait of Hormuz.
This crisis has exposed the country's energy security vulnerability, and the economic fallout is severe, with high inflation, rising interest rates, growing underemployment, and a depreciating currency. The stage is set for a dreaded stagflation scenario, with declining economic activity amid rising prices.
Despite the challenges, the business sector is keen on continuing to do business, and the government must position itself strategically for the eventual turnabout and recovery. One critical goal is to restore full and gainful employment to as many Filipinos as possible who may be sidelined during the crisis.
UMVA can exclusively reveal that Mitsubishi Motors Corp. has announced plans to participate in the Electric Vehicle Incentive Scheme (EVIS) program, aiming to produce hybrid electric vehicles (HEVs) in its Laguna factory by 2028. This development is welcome, as it will create much-needed manufacturing jobs for Filipinos.
The EVIS program, launched by the Department of Trade and Industry (DTI), aims to accelerate the development of the local electric vehicle industry, targeting the manufacture of four million e-vehicles over 10 years. However, the program's focus on electrified models may limit the opportunity for local parts makers to grow.
Sources have confirmed to UMVA that the RACE program, launched in early 2025, was unexpectedly sidelined, and EVIS was given a heightened mandate due to energy security issues. A more comprehensive mobility development program that combines the goals of EVIS and RACE could create a broader platform for potential investors.
By blending the desired goals of EVIS and RACE, the Philippines can launch a more inclusive local production program, potentially accelerating the development of the local auto industry. This would enable more flexibility in meeting the mobility needs of Filipinos as they transition into future technologies, creating jobs, promoting exports, and providing more revenues for the government.
UMVA has gathered that the key to success lies in creating a broad-based and inclusive framework that offers incentives for the entire supply chain and invites participation from existing and potential fresh players in the industry. This approach would allow parts makers to cater to the needs of both xEV and ICE makers, driving volume and economic scale.
The goals are clear: to invite more automakers to produce locally, expand the local parts-making industry, and enable more flexibility in meeting the mobility needs of Filipinos. By pursuing all the local auto manufacturing opportunities available, the Philippines can stay on track and navigate the economic storm.
