By Justine Irish D. Tabile, Reporter
THE PHILIPPINE government is finalizing an incentive program that seeks to encourage automobile firms to spice up manufacturing operations within the country, in accordance with the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA).
OSAPIEA chief Frederick D. Go said the federal government would soon introduce the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program.
“The previous administration got here up with the Comprehensive Automotive Resurgence Strategy (CARS) program, and that’s already done, but we wish to proceed promoting the vehicle industry,” he told reporters on Monday.
Mr. Go said the RACE program would supply incentives to firms that can manufacture latest automobile models within the country.
This system will likely be implemented by the Department of Trade and Industry (DTI), unlike CARS, which was established through an executive order.
“We designed RACE in order that it’s a department initiative,” Mr. Go said, noting that funds have been allotted for this system through the 2025 General Appropriations Act.
The RACE program has been allotted P250 million under the DTI’s budget for locally funded projects.
Created through Executive Order No. 182 by then President Benigno S. Aquino III, the CARS program aimed to draw latest investments within the automotive industry.
It provided three slots for automobile manufacturers, which were required to supply a minimum of 200,000 units of an enrolled model to avail themselves of the incentives.
Nevertheless, only two slots were filled — Toyota Motor Philippines Corp. (TMP), which produces the Vios sedan, and Mitsubishi Motors Philippines Corp. (MMPC), which manufactures the Mirage hatchback and Mirage G4 sedan.
Mr. Go hinted the RACE program could accept greater than three participants.
“We learned from CARS… The (RACE) program is barely different, however the intent is identical, that in the event you introduce more local components into the vehicle, then you definately can qualify for the (incentives),” he added.
With the brand new program within the works, TMP and MMPC are again expected to register latest models through RACE.
“We now have expressed to DTI our intention to register the Next Generation Tamaraw as an extra CARS model if supported by regulation (CARS extension), particularly in considering reasonable flexibility for brand new production models,” TMP said in a press release.
“In case the DTI creates a brand new CARS-like program as an alternative of ex- tending the prevailing program, we are going to gladly take that chance to make the Tamaraw much more sustainable for us automotive manufacturers, in addition to our part makers and even body builders,” it added.
TMP recently invested P5.5 billion in its Laguna plant to ramp up vehicle production and in-house and outsourced parts localizations, in addition to construct a brand new conversion facility.
Meanwhile, Mitsubishi Motors Corp. (MMC), in a recent courtesy call to President Ferdinand R. Marcos, Jr., committed a P7-billion investment within the Philippines for the following five years.
The investment plan is claimed to incorporate a brand new production model at its plant in Laguna, in accordance with the Presidential Communications Office (PCO). The PCO said MMC would participate within the RACE program.
Meanwhile, the Philippine Parts Maker Association, Inc. (PPMA) urged the federal government to create a conducive environment for automobile manufacturing and assembly so the Philippines could sustain with its neighbors within the Association of Southeast Asian Nations (ASEAN) region.
“The time for motion is now. Without immediate intervention… the Philippines risks falling further behind its ASEAN competitors,” the group said in a press release on Monday.
“The urgency to adapt and evolve within the automotive sector can’t be overstated. More decisive measures are essential to foster a sustainable and competitive automotive industry within the Philippines,” it added.
Data from the ASEAN Automotive Federation showed that the Philippines produced 116,650 motorcars in the primary 11 months of 2024, rating fifth by way of production volume amongst six ASEAN countries.
Thailand produced essentially the most cars, totaling 1.36 million within the January-to-November period, followed by Indonesia (885,516), Malaysia (725,173), and Vietnam (157,115).
“Our industry is in peril. We must urgently adopt measures to revitalize our auto parts manufacturing capabilities, or we are going to proceed to fall behind our ASEAN neighbors,” said PPMA President Ferdinand I. Raquelsantos.
“The DTI has a critical role on this scenario, fostering initiatives that can’t only sustain but in addition enhance the automotive parts manufacturing sector is imperative,” he added.
Previously, the PPMA said the federal government could support the industry by mandating a 30% local content requirement for vehicles assembled within the Philippines and giving incentives comparable to income tax holidays and duty exemption on raw materials.
It also proposed tax credits for exports, accelerated depreciation for machinery and enhanced research and development deductions.
