Philippine auto parts manufacturers are warning that the veto of funding for the Comprehensive Automotive Resurgence Strategy (CARS) could accelerate the decline of the country’s already fragile automotive manufacturing sector.
In a statement, the Philippine Parts Makers Association (PPMA) said the withdrawal of budget for CARS arrearage payments sends a troubling signal of reduced government commitment to the industry at a time when it is struggling to stay competitive.
The group called for urgent dialogue with policymakers following the President’s veto, and sought clarity on the future of a related program, the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE).
PPMA president Ferdinand Raquelsantos said CARS and RACE were designed to rebuild vehicle assembly volumes, strengthen local parts manufacturing, and help the Philippines regain its footing within the ASEAN automotive landscape. For industry players, he stressed, these programs are not optional incentives but essential lifelines.
“The Philippine auto parts industry needs CARS and RACE to survive,” Raquelsantos said. “Without sustained and predictable government support, local manufacturers will continue to lose ground, investments will slow, and skilled jobs will disappear.”
The association noted that the Philippines has steadily fallen behind its regional peers. Local vehicle production remains limited, forcing many parts makers to rely on exports or diversify into non-automotive industries just to remain viable.
“Automotive manufacturing has always been a cornerstone industry in Southeast Asia,” Raquelsantos said. “If we allow our ecosystem to weaken further, recovery will be extremely difficult.”
PPMA cited industry data showing Thailand produces more than two million vehicles annually, while Indonesia and Vietnam continue to expand both conventional and electric vehicle manufacturing.
Beyond assembly plants, PPMA emphasized the sector’s strong multiplier effect, supporting steel, plastics, electronics, rubber, logistics, and tooling. Each locally assembled vehicle generates demand for thousands of parts that could be produced domestically if volumes are sustained.
In response to the veto, PPMA reiterated its call for constructive engagement with government leaders, lawmakers, and economic managers to explain how automotive programs work—and why they are critical to the industry’s survival.
