The Board of Investments (BOI) has moved to calm investor nerves, assuring Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp. that nearly P4 billion in unpaid incentives under the Comprehensive Automotive Resurgence Strategy (CARS) program will still be settled—despite President Ferdinand Marcos Jr.’s veto of the budget allocation.
BOI Managing Head Ceferino Rodolfo said the agency is coordinating closely with the Department of Budget and Management (DBM) and other government offices to identify a mechanism that would allow payment of the arrears, which total P3.9 billion. The amount covers fiscal support already earned by the two automakers based on validated performance deliveries.
Rodolfo stressed that the claims went through what he described as a “robust and transparent inter-agency process,” underscoring that the obligations are not discretionary but tied to commitments already fulfilled by Toyota and Mitsubishi under the program.
The assurances come after Marcos vetoed several unprogrammed appropriations in the national budget, including funds earmarked for CARS. Rodolfo said the BOI respects the President’s decision and understands the broader fiscal discipline behind the move, even as it works to ensure that prior commitments are honored.
From a policy standpoint, the episode highlights the delicate balance between fiscal prudence and investor credibility. While the veto signals tighter control over unprogrammed spending, delayed payments risk undermining confidence in government incentive schemes—particularly in capital-intensive sectors like automotive manufacturing.
The CARS program was designed to rebuild the Philippines’ auto manufacturing base, anchoring investments through long-term, performance-based incentives. Failure to settle arrears promptly could send mixed signals to both existing participants and future investors evaluating similar programs.
By publicly reaffirming its commitment to pay, the BOI appears intent on containing reputational risk and preserving trust in the country’s industrial policy framework—even as it navigates tighter budget realities.
