CARS, RACE veto puts auto manufacturing in peril — PPMA

The Philippine Parts Makers Association (PPMA) said the vetoing of the Comprehensive Automotive Resurgence Strategy (CARS) and the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) programs imperils the automotive manufacturing industry.

On Monday, Malacañang announced that President Ferdinand Marcos Jr. had vetoed the budget allotted for the fiscal support for the CARS program, amounting to P4.32 billion along with the RACE program pegged at P250 million.

Funding for the CARS and RACE programs was among the 10 line items, amounting to P92.5 billion, of the P6.793 trillion 2026 General Appropriations Act (GAA) crossed out by the President before signing the law.

Urgent dialogue

In reaction, PPMA President Ferdi Raquelsantos called for urgent dialogue with policymakers, as the budget for the two vetoed programs is not merely a support mechanism but a critical lifeline.

“The Philippine auto parts industry needs CARS and RACE to survive. Without sustained and predictable government support, local manufacturers will continue to lose ground, investments will slow, and skilled jobs will disappear,” Raquelsantos said in a statement on Wednesday.

Across Southeast Asia, automotive manufacturing consistently ranks among the top manufacturing industries in terms of output, employment and exports.

Countries such as Thailand, Indonesia, and Vietnam have treated automotive manufacturing as a strategic sector, supporting it through long-term industrial policies and production scale.

Thailand alone produces more than two million vehicles annually, while Indonesia and Vietnam continue to expand both conventional and electric vehicle manufacturing.

Phl has fallen behind

Raquelsantos said in contrast, the Philippines has steadily fallen behind its ASEAN neighbors. Local vehicle production remains limited, and many parts makers now depend on exports or non-automotive industries to stay afloat, noting that the gap continues to widen as other ASEAN countries accelerate investments in new technologies and supply chains.

“The reality is we are already lagging behind ASEAN. Automotive manufacturing has always been a cornerstone industry in Southeast Asia. If we allow our ecosystem to weaken further, it will be extremely difficult to recover,” he stressed.

Industry data shows that Philippine automotive manufacturing reached its peak during the 1990s under the Ramos administration, following the implementation of the Car Development Program.

During that period, the industry saw stronger assembly volumes, higher local content, and a more robust domestic supplier base.

While later initiatives under succeeding administrations attempted to revive the sector, the industry has never fully returned to that level of scale and stability.

“We were almost there. The factories are here. The suppliers are here. The workforce and technical know-how are here. What we need is continuity and confidence from the government,” he emphasized.

PPMA also underlined that automotive manufacturing has a powerful multiplier effect, supporting industries such as steel, plastics, electronics, rubber, logistics and tooling. Each locally assembled vehicle creates demand for thousands of parts, many of which can be produced domestically if volumes are sustained.