Department of Trade and Industry (DTI) officials are scrambling to find new ways to pay P4.98 billion in overdue incentives to car manufacturers after President Ferdinand Marcos Jr. vetoed funding for the program in the 2026 national budget.
Board of Investments (BOI) managing head Ceferino Rodolfo said Monday the agency is working with the Department of Budget and Management (DB<) to settle arrears under the Comprehensive Automotive Resurgence Strategy (CARS).
The program was designed to boost local vehicle manufacturing, but a significant portion of its funding was slashed from the 2026 General Appropriations Act.
The BOI had requested P3.99 billion to cover unpaid tax payment certificates, which are earned by companies based on meeting specific production targets. However, the 2026 National Expenditure Program provided only P225.653 million in current appropriations and P333.504 million in unprogrammed funds. The latter was ultimately struck down by the president.
“We fully respect the decision of the President,” Rodolfo said.
“To our investors, we firmly assure that we are already working with other agencies, principally the DBM, in identifying a mechanism to ensure payment of CARS arrearages, especially as these had been based on validated delivery of performance commitments,” said Rodolfo.
Data from the BOI showed that P5.43 billion in tax payment certificates have been issued under the program since its inception, but only P1.443 billion have been funded. The remaining balance includes debts accumulated during the 2024 and 2025 budget cycles.
The P4.98 billion in outstanding obligations does not include a pending application from Toyota Motor Philippines for P1.557 billion. That claim covers the production of 38,127 Vios units manufactured between September 2023 and July 15, 2024.
Rodolfo said settling these debts is critical for maintaining investor confidence in the government’s industrial policies.
Participants in the CARS program, which include Toyota Motor Philippines and Mitsubishi Motors Philippines, committed to large-scale local production in exchange for fiscal support.
