President Marcos approves 5-year extension of CARS program

MANILA, Philippines — Malacañang has given the green light for the five-year extension of the Comprehensive Automotive Resurgence Strategy (CARS) program to expand the country’s automotive industry, the Private Sector Advisory Council (PSAC) said.

The PSAC said in a statement yesterday that President Marcos has approved the extension of the program that helps attract new investments and develop the country as a regional automotive manufacturing hub following the council’s recommendation.

The PSAC pointed out that the CARS program has demonstrated its effectiveness and value as a high-end manufacturing operation which has greatly helped in the creation of jobs, transfer technology, and boost global competitiveness by supporting domestic auto manufacturing and stimulating investment.

“The extension of CARS for five years will continue to provide incentives and support for manufacturers that meet specific requirements in terms of investment, production, and technology development,” it said.

According to PSAC, the program would continue to provide significant employment opportunities as well as the foundation for the future development of the economy.

Under Executive Order 182 issued by the late president Benigno Simeon Aquino III for the CARS program, the government offers fiscal support to participants in exchange for investments for the production of at least 200,000 units of their enrolled vehicle model within six years.

An enrolled model is qualified for fiscal support amounting to P9 billion.

Vehicles enrolled under the program are the Mirage model of Mitsubishi Motors Philippines Corp. (MMPC) and the Vios model of Toyota Motor Philippines Corp. (TMP).

Figures from the Department of Trade and Industry (DTI) showed that combined production under the program stood at 207,165 units as of December 2022.

Of the total, TMP, which started production in July 2018, accounted for 134,242 units of its Vios. MMPC, which started production in February 2018, produced a total of 72,923 units of its Mirage model.

In August last year, TMP first vice president for corporate affairs Rommel Gutierrez said they are hoping for a three-year extension to 2027 for the period to meet their vehicle production commitment.

TMP has been pushing for an extension of the six-year compliance period for the CARS program as early as 2020, based on previous news reports.

Gutierrez earlier cited the higher excise tax slapped on cars under the government’s tax reform package, which took effect in 2018, the Taal Volcano’s eruption in 2020, and the COVID-19 pandemic, as among the factors that have brought challenges to the automotive industry and affected vehicle demand and sales.

Apart from the CARS program, the PSAC also pushed the Motorcycle Micro Business Program, as part of the continuous effort to create more employment opportunities and accelerate the development of nanoprenuers and the micro, small, and medium enterprises (MSMEs).

While waiting for the passage of the law, PSAC is seeking for a nationwide expansion via executive order which to create over two million jobs for habal-habal riders and provide access to transform their livelihoods, becoming platform self-entrepreneurs.

During the meeting with President Marcos, Transportation Secretary Jaime Bautista provided an update on their ongoing review of the Executive Order (EO) for the Motorcycle Micro Business Program.

Vice President and Education Secretary Sara Duterte, Executive Secretary Lucas Bersamin, DOLE Secretary Bienvenido Laguesma, DTI Secretary Alfredo Pascual, NEDA Secretary Arsenio Balisacan, and other esteemed Cabinet Members also attended the meeting.

PSAC lead convenor and Aboitiz Group president and CEO Sabin Aboitiz and the Council’s jobs sector lead, RFM Corp. CEO Jose Maria Concepcion led the private sector’s representatives.