PBBM defunds auto industry programs in 2026 PH budget

PBBM scraps 2026 funding allocation for CARS, RACE program

President Ferdinand “Bongbong” Marcos, Jr. has signed the 2026 national budget that amounts to PHP 6.79 trillion. But as far as the local motoring industry is concerned, the funding allocations for programs intended to entice car manufacturers to invest in the country through fiscal incentives has not been included in the appropriations.

PBBM has cut a total of 7 unprogrammed funds in the 2026 General Appropriations Act, amounting to PHP 92.5-billion. That included the PHP 4.32-billion fund for fulfilling the government’s obligations under the Comprehensive Automotive Resurgence Strategy (CARS) program, and the PHP 250 million fund for Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program.

The 2026 proposed budget for the CARS program was intended to cover the government’s remaining fiscal obligations to Toyota Motor Philippines Corporation and Mitsubishi Motors Philippines Corporation – the two manufacturers that participated in the CARS program when it was launched in 2015.

Under the CARS program, the government promised to provide the participants fixed investment support and production volume incentives, provided that participating automakers reach the minimum volume target sales of 200,000 locally-made units. Toyota has already fulfulled that requirement with the Vios. Mitsubishi may have already met it with the Mirage G4 but we still need confirmation on the matter. 

However, with the CARS program budget cut in the 2026 GAA, the Board of Investments will have to scramble and to fulfill the government’s end of the deal. BOI said they are already reaching out to other agencies such as the Department of Budget and Management (DBM) to ensure the automakers will still get their CARS incentives.

On the other hand, the RACE program was planned by the Department of Trade and Industry (DTI) in a bid to strengthen the automotive industry with another incentive program. However, with the funding likewise scrapped by PBBM for 2026, it’s likely to be stuck in neutral this year.

Based on a report by Metrobank Wealth Insights, PHP 1.4 billion was already paid for by the government, while PHP 3.987 billion remains unfunded in the CARS program. These developments are definitely not good news, and hurts the country’s image even more not just for auto manufacturers, but foreign investors altogether.