The government’s bid to revitalize the automotive industry has attracted two Japanese companies with strong presence in the Philippines — Toyota and Mitsubishi, industry sources who did not wish to be named said.
Toyota and Mitsubishi were the same companies that participated in a similar program that expired in 2022.
Secretary Frederick Go, Special Assistant to the President on Investment and Economic Affairs, told reporters on Monday the Department of Trade and Industry (DTI) has finished the concept of Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE).
One of the sources said Toyota Motor Philippines Corp.’s (TMP) new generation Tamaraw will be the first to register under RACE.
Under the new program, which Go described as the Comprehensive Automotive Resurgence Strategy (CARS) 2.0 that started in 2016, local assemblers are required to invest in large parts and meet volume requirements to enjoy incentives.
TMP and MMPC enrolled their Vios and Mirage models, respectively, in CARS, which entitled them to tax rebates worth P9 billion each.
TMP officials could not be reached for comment, but Josephine Villanueva, TMP’s first vice president for corporate affairs,
in a separate interview on February 12, said the company has expressed to DTI its intention to register the Next Generation Tamaraw as an additional CARS model if supported by regulation, like a CARS extension.
“In case the DTI creates a new CARS-like program instead of extending the existing program, we will gladly take that opportunity to make the Tamaraw even more sustainable for us automotive manufacturer, as well our partsmakers and even bodybuilders,” Villanueva said in that interview.
Officials of MMPC did not confirm the possible enrollment of the Xpander in the RACE program.
“Officials are still talking in Tokyo,” a source from MMPC said, referring to the headquarters of the mother company Mitsubishi Motors in Japan.
On February 7, state-run Philippine News Agency reported Mitsubishi Motors Corp. has “expressed intent to invest around P7 billion in the Philippines in the next five years,” citing a Presidential Communications Office announcement following a courtesy call of the Japanese carmaker’s executives to President Ferdinand Marcos Jr.
In a January 28 social media post, DTI Secretary Cristina Roque said she had discussions with MMPC officials on “the company’s request under the RACE program, but declined to elaborate.
DTI undersecretary and BOI managing head Ceferino Rodolfo said in a text message on Monday the agency aims to finalize the guidelines of RACE this week.
Go said on Monday RACE will be enforced through a department order and a budget has been set aside for the program.
The General Appropriations Act for 2025 allots a P250 million budget for RACE, documents showed.
“RACE is the new program. We have to help the local vehicle industry. (RACE) is slightly different.
The intent is the same, if you introduce more local components into the vehicle, then you can qualify. “
Unlike CARS, Go said RACE will not be limited to three slots. “We learned lessons from CARS, that’s why they’re redesigning RACE not to be worded that way,” Go said.
The third slot for CARS was not filled, leaving an unused budget of P9 billion as Malaya Business Insight reported on Nov. 25, 2022, when the Board of Investments discounted the possibility of opening the third slot to a new applicant.
Section 11 of CARS called for the establishment of the Automotive Development Fund in the General Appropriations Act “for a total fiscal support for the program will be given beginning 2016, and shall not exceed Twenty-Seven Billion Pesos (P27 billion), with each enrolled Model qualified to a fiscal support in an amount not exceeding Nine Billion Pesos (P9 billion).”
Like CARS, Go said, RACE will set a higher local content requirement.
Local content under CARS was 51 percent.
“We’re only giving incentives if you give jobs to the Philippines. The whole purpose of this, of creating incentives for manufacturing, is because you give jobs to Filipinos,” he said.
Lockdowns due to COVID-19 starting in 2020 had impaired the ability of TMP and MMPC to comply with the volume requirement of 200,000 units for each of the enrolled models for the six-year duration of the program.
These companies were given time to avail of the incentives until the duration of the model life of their vehicles, Mirage and Vios in 2024.
