SAVINGS from last year will be used to fund the Comprehensive Automotive Resurgence Strategy (CARS) program, the P4.32-billion allocation for which was vetoed by President Ferdinand Marcos Jr. earlier this month.
Marcos’ move — part of P92.5 billion in unprogrammed items that were dropped from the 2026 national budget of P6.793 trillion — had raised industry concerns as participating automakers were reportedly still owed P3.99 billion in incentives.
In a joint statement on Monday, the Budget, Trade and Finance department said that valid obligations under CARS could be settled via declared and verified savings, mainly from the Department of Public Works and Highways, subject to presidential approval and compliance with fiscal rules.
“Based on the tax payment certificates (TPCs) already issued and validated, the government has the capacity to settle dues to participating car manufacturers, including Toyota and Mitsubishi, as well as eligible autoparts makers,” the Budget department said.
“These payments will be supported by available FY 2025 savings, subject to the approval of the Office of the President and compliance with all applicable fiscal and legal requirements,” it added.
The Budget department said any remaining validated claims that had not yet received TPCs and were not covered by the current budget may be included in the proposed 2027 National Expenditure Program.
“Obligations supported by issued and validated TPCs will be paid in a legal, orderly, and responsible manner, consistent with our fiscal capacity and budgetary rules,” Budget Secretary Rolando Toledo said.
Finance Secretary Frederick Go echoed this, saying that they were given clear directions to honor commitments made to investors who had placed their trust in the Philippines.
“We will ensure that legitimate obligations are paid — consistent with the law and within the capacity of public funds,” Go said.
“Our message to the auto industry is clear: do not worry — you remain part of the government’s long-term plan for industrial development, jobs creation and economic growth,” he added.
The agencies also clarified that TPC validation was continuing and that the Trade department would ensure that all claims were accurate and compliant before any funds are released.
“The government remains open to dialogue and firmly committed to practical, lawful, and fiscally responsible solutions that support the auto industry while safeguarding public interest,” Toledo said.
“We will ensure that the government maintains a clear and responsible course in settling obligations and supporting the auto industry, always in accordance with the law and the capacity of public funds.”
Toyota Motor Philippines Corp., which along with Mitsubishi Motors Philippines Corp. had signed up for the CARS program, said it “sincerely appreciates the government’s decisive action to reassure investors and stakeholders who have long supported the Philippine automotive manufacturing industry.”
“This move reinforces confidence in the country as a sustainable base for automotive manufacturing,” it added.
The CARS program, launched in 2015, provided fiscal and non-fiscal incentives to automakers that committed to produce at least 200,000 units over six years.
The program was extended for five years in 2023 and prior to Marcos’ veto, officials had said that funding had been secured for incentives due to Toyota and Mitsubishi.
WITH A REPORT FROM CHYNNA GRACE ONG
