President Ferdinand Marcos Jr. approved the implementation of the incentives program for vehicle manufacturers by another five years, according to the Private Sector Advisory Council.
The council said the president supported its recommendation to give the participants in the Comprehensive Automotive Resurgence Strategy another five years to comply with the terms of the program.
CARS is a six-year incentives program designed to spur local vehicle manufacturing by requiring participating car companies to manufacture 200,000 units in a span of six years or throughout the life of the program.
The incentives come in fiscal and non-fiscal support to qualified participants, but only Toyota Motor Philippines and Mitsubishi Motor Philippines Corp. passed the accreditation process.
Under the CARS program, the participant-companies were required to place investments on capital equipment to sustain production of 200,000 units each of enrolled models, which are the Vios for Toyota and Mirage for Mitsubishi.
The two companies spent over P9.5 billion in capital investments on machineries and parts manufacturing.
Members of PSAC said the program proved its effectiveness and value as a high-end manufacturing operation which greatly helped in the creation of jobs, transfer of technology and boosting global competitiveness by supporting domestic automotive manufacturing and stimulating investment.
The program is anchored on the resurgence of the automotive manufacturing industry and in priming the country as a regional automotive manufacturing hub.
It offers P9 billion worth of time-bound and performance-based fiscal and non-fiscal incentives to each qualified participant to support new investments in fixed-capital expenditures in new parts making capability and to encourage large-scale production in vehicle assembly.
The approval came as Mitsubishi’s compliance to CARS is about to expire before end-2023, while Toyota’s participation is expected to come to an end by 2024.
Participants in the CARS program earlier said they could not comply with the volume of production required by the program after the pandemic upended their long-term growth plans.
The PSAC also introduced a new recommendation which further supports MSME development. The Motorcycle Micro Business Program aims to create over two million jobs for “habal-habal” riders and provide access to transform their livelihoods, becoming platform for self-entrepreneurs.
The council is seeking for a nationwide expansion of the law through an executive order for the Motorcycle Micro Business Program. The Department of Transportation is reviewing the EO.