PH auto parts suppliers concern over CARS, RACE allocation removal in 2026 nat'l budget

MANILA: The removal of allocation for Comprehensive Automotive Resurgence Strategy (CARS) and the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) programs in the 2026 General Appropriations Act will take its toll not only on local vehicle manufacturers but with the connected industries to it as well.

This was the concern of the Philippine Parts Makers Association in its latest statement following the recent approval of the national budget) for the year.

According to the organization, the non-inclusion of the supposed funding for the aforementioned line items under the unprogrammed appropriations “threatens what remains” of local vehicle manufacturing.

“CARS and RACE are critical to the survival of local car manufacturing,” PPMA President Ferdinand Raquelsantos was quoted as saying. “Without sustained production volumes, there is no viable auto parts industry, and without parts makers, vehicle assembly cannot survive.”

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The group noted that automotive manufacturing is one of the key sectors in Southeast Asia — saying that Thailand, Indonesia, and Vietnam are attracting investments.  “In all these countries, locally assembled cars support thousands of parts suppliers, from stamping and plastic injection to electronics and wiring harnesses.”

However, the Philippines — PPMA claimed — has “steadily fallen behind” as local assembly volumes remain low, and most vehicles sold in the market are imported as completely built units.

“Automotive manufacturing has always been a core industry in Southeast Asia,” Raquelsantos said. “When you lose local assembly, you lose the ecosystem that supports it. That includes tooling, testing, engineering, and thousands of skilled manufacturing jobs.”

Further, the group mentioned that in the 1990s, local automotive manufacturing experienced multiple models being assembled locally with higher local content and stronger supplier participation.

“We were almost there,” Raquelsantos said. “The factories are here. The suppliers are here. The workforce and technical know-how are here. What has been missing is policy continuity and long-term commitment.”

Meanwhile, the PPMA is seeking to meet with legislators in the House of Representative and Senate — to have a discussion on how automotive programs work and why they matter to the motoring public.

“This is not just about manufacturers,” Raquelsantos said. “When cars are built locally, you create jobs, develop engineering talent, and strengthen supply chains. We want to sit down with policymakers and explain how CARS and RACE help keep car manufacturing alive in the Philippines.”

Earlier, Senate Finance Committee Chair Sherwin Gatchalian also expressed his concern over the move to take out the budget for CARS and RACE in this year’s allocation.

In an earlier briefing, he said that Toyota and Mitsubishi were promised to enjoy tax incentives — which they have yet to receive.

If it was included in the national budget’s final version, CARS and RACE would have had the following funding:

• CARS P4.32 billion
• RACE P250 million

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