The government is pursuing a funding solution to ensure that incentives promised to automotive companies under the Comprehensive Automotive Resurgence Strategy (CARS) program are honored, despite the recent veto.

Trade Secretary Cristina Roque said the government has already “resolved” the automotive industry’s concerns over the scrapped ₱4.32-billion budget for the CARS program.

Roque said the government will soon issue a detailed announcement on this funding solution, which would include the Department of Public Works and Highways (DPWH).

“The investors, the participants in the CARS program, have already been informed earlier about this by Secretary [Frederick] Go,” she told Manila Bulletin.

In a press briefing on the sidelines of the “Big Bold Reforms” event on Friday, Jan. 16, Go said the government will fulfill its obligations to participants in CARS through a funding mechanism.

This, he said, affirms that the government stands by its commitments to investors that are crucial for the country’s economic growth.

Last week, the CARS program was part of the ₱92.5 billion in unprogrammed appropriations (UAs) that were vetoed by President Ferdinand “Bongbong” Marcos Jr. under this year’s record ₱6.793-trillion national budget.

Marcos said this was to “ensure that public funds are expended in clear service of national interests.”

The move, however, was criticized by multiple automotive groups for threatening to disrupt an already struggling industry.

CARS, which is overseen by the Board of Investments (BOI), grants incentives to attract strategic investments in the manufacturing of vehicles and their components in the country.

Under the program, fiscal support is provided to companies that produce at least 200,000 units of their enrolled model within six years.

Toyota Motor Philippines Corp. (TMPC) and Mitsubishi Motors Philippines Corp. (MMPC) are the two participants, having enrolled the Vios and Mirage models, respectively.

Trade Undersecretary and BOI Managing Head Ceferino Rodolfo said the vetoed ₱4.32 billion was intended to cover the government’s remaining obligations to TMPC and MMPC.

Automotive groups have stressed that refusing to honor these incentives for companies that invested heavily to hold up their end of the bargain could be catastrophic to the government’s investment push.

With the planned funding scheme for the program already underway, the government aims to reinforce its pledge not only to entice investors to enter the country but also to help them grow.

Still, a question mark persists over the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program, which also saw ₱250 million of its proposed funding scrapped.

Go did not confirm any funding scheme for this program.

While it has not yet been launched, RACE seeks to grant incentives to auto companies, with a focus on the manufacturing of four-wheeled internal combustion engine vehicles, but with a lower production requirement.

The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) earlier said the program is “an important transition to future industry development programs,” noting that it should be implemented as soon as possible.