Gov’t urged to fulfill its commitments under CARS program

The government should fulfill its commitments to car manufacturers to ensure that the Philippines remains a competitive investment destination for foreign investors, business groups said.

“We need investors. And if that can be another issue against us, we should settle that,” Sergio Ortiz-Luis, Jr., president of the Philippine Exporters Confederation, Inc. told BusinessWorld.

Mr. Ortiz-Luis said the government should resolve these issues surrounding car manufacturers to ensure the country can still compete for investments.

“With all the issues against us, the ease of doing business, and then this commitment, we shouldn’t allow that because we are already lagging behind in investments. Let’s not add to the issues,” he added.

The Board of Investments (BoI) told a Senate hearing on Monday that the government is yet to pay the participants of the Comprehensive Automotive Resurgence Strategy (CARS) program.

Under the CARS program, the government promised to provide the participants fixed investment support and production volume incentives, of which PHP 1.4 billion was already paid for by the government, while PHP 3.987 billion remains unfunded.

However, CARS program arrearages were only allocated PHP 225 million in the proposed budget of the Department of Trade and Industry for 2026.

BoI Investment Promotions Services Executive Director Evariste M. Cagatan said that the department initially requested the full amount for the 2026 budget, but the allocation was reduced due to lack of “fiscal space.”

“We want to pay them, because the participants in CARS are also the ones that we are also targeting for the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program,” she said.

“If they are not paid, they will not have the confidence to [participate in] our RACE program as well as the Electric Vehicle Incentive Strategy (EVIS) for parts makers,” she added.

Senator Sherwin T. Gatchalian said he is “very concerned” over this issue as it hurts the country’s image among foreign investors.

“Pag masama experience nila, kakalat ’yan sa buong mundo, wala nang maniniwala sa atin next time (If they have a bad experience, it will be known around the world and no one will believe us next time),” he said.

“We have to make sure that we always remain true to our commitments to our investors.”

Philippine Chamber of Commerce and Industry President Enunina V. Mangio said that the government should find a way to settle the payments for CARS participants.

“If our image will be damaged or will be tainted by this nonperformance of our commitment, it would not be worth it to the Filipino people, especially hearing all these kinds of problems as far as corruption is concerned,” she told BusinessWorld. 

“So, the government must, by all means, provide and pay for this commitment,” she added.

Trade Secretary Ma. Cristina A. Roque said that she will be coordinating with Budget Secretary Amenah F. Pangandamanan to find out ways on how the government can address this matter.

“We really plan to get it from the budget, so I am in talks with the Department of Budget and Management, and I am also in talks with Toyota and Mitsubishi, so everything is okay,” she told reporters on Wednesday. 

Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp. were participants in the CARS program.

“We have already talked about different ways to pay, and we are still coordinating. That is what we owe to them, so definitely the government will pay them,” Ms. Roque said. — Justine Irish D. Tabile, Reporter