Come April or May, the government will start accepting car manufacturers’ applications for “Revitalizing the Automotive Industry for Competitiveness Enhancement” (RACE), a three-year, P9-billion incentive program that seeks to establish the country as a regional manufacturing hub.
Trade Secretary Cristina Roque yesterday said the DTI, the Department of Finance, and the Department of Budget and Management will issue a joint administrative order (JAO) on RACE next month.
“We’re expecting to complete the JAO by mid-March and open the application period for participants by April or May this year,” Roque said in a text message to media.
Corazon Dichosa, Board of Investments (BOI) executive director, said in a text message that Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp. have expressed intentions to enroll the TMP Tamaraw and MMPC Xpander models under RACE.
“They are just waiting for the JAO and the opening of the application period,” Dichosa said.
“Instead of an EO (executive order), a JAO will be issued for easier implementation,” Roque said.
“The mechanics are contained in a Program Concept that was submitted to Congress for approval and consideration in the 2025 GAA (General Appropriations Act which we got,” Roque said.
GAA documents showed that a P250-million budget was earmarked for RACE this year.
The RACE concept paper said the program will pave the way for a transition from internal combustion engines (ICE) to electric cars. It will run for three years, equivalent to an extension of the previous Comprehensive Automotive Resurgence Strategy (CARS) which lapsed in 2022.
TMP and MMPC participated in the old program via their Vios and Mirage models, respectively.
The concept paper said RACE will be open to three specific models of four-wheeled internal combustion engine (ICE) vehicles, with a commitment to manufacture 100,000 units during the duration of the program.
RACE will offer a time-bound direct subsidy based on capital expenditure and volume of production of qualified automotive manufacturers, the paper said.
Each participant will be qualified for fiscal support in the form of a tax payment certificate not exceeding P3 billion on the capital expenditure for tooling and equipment to manufacture the RACE model, it added.
Each may be entitled to the fixed investment support (FIS) equivalent to not more than 40 percent of capital expenditure.
The document showed that to avail of the FIS, the participants must satisfy the following requirements: new investments in the manufacture of the enrolled model; commitment to manufacturing 100,000 units; introduction of the enrolled model to the market within two years; consistently meeting the criteria for enrollment of car makers; and attainment of other conditions to be imposed at the time of registration.
The concept paper said the approved FIS amount shall be provided and credited in three equal tranches with the first tranche credited after the production of the 1,000 units of the enrolled model.
The second tranche shall be credited after the production of the first 10,000 units while the third tranche shall be credited after the second 10,000 units.
The BOI’s concept paper said RACE is meant to sustain the gains achieved during the implementation of the CARS program which also provided fiscal support worth P27 billion to three automotive companies.
The concept paper said CARS, under EO 182, contributed to the achievement of the desired localization levels among the participants, and the development of the capabilities of the local parts manufacturing industry.
The old program required the enrolled models to attain a 51-percent local content.
“The Program aims to establish the country as a regional manufacturing hub. It provides fiscal support to stimulate local and foreign investments in local automotive manufacturing thereby reducing reliance on imports. RACE aims to foster the growth of small and medium enterprises in the automotive supply chain,” the paper said.
