Government incentives under the Comprehensive Automotive Resurgence Strategy (CARS) Program could finally begin flowing this year, with funding initially sourced from declared savings of the Department of Public Works and Highways (DPWH).
In a joint statement, the Department of Budget and Management (DBM), Department of Trade and Industry (DTI), and Department of Finance (DOF) said the state has sufficient fiscal capacity to meet its obligations to participating carmakers Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp., as well as qualified auto parts manufacturers.
The agencies said incentive payments may be supported by available fiscal year 2025 savings, subject to approval by the Office of the President and full compliance with fiscal and legal requirements. They stressed that the veto of certain provisions in the FY 2025 General Appropriations Act (GAA) does not signal a retreat from government support for the automotive industry.
According to the agencies, programmed appropriations under the FY 2025 GAA remain available, including funds for the CARS Program Project Management Office and fiscal support arrearages.
Although the fiscal support arrearages line item was excluded from the FY 2026 GAA, the government may still settle validated obligations by augmenting existing allocations under the DTI–Board of Investments budget using verified DPWH savings, subject to constitutional safeguards.
Payments will be based on validated Tax Payment Certificates already issued. Any remaining validated claims without TPCs may be proposed for inclusion in the FY 2027 National Expenditure Program, subject to cash programming and available fiscal space.
The agencies said the approach balances industry support with due process and prudent fiscal management, adding that validation of claims remains ongoing.
Toyota Motor Philippines welcomed the clarification, saying the move reassures investors and reinforces confidence in the Philippines as a sustainable automotive manufacturing base.
