Amid volatile global energy prices driven by conflicts in the Middle East, the Philippines has revoked billions of pesos in incentives for automakers like Toyota and Mitsubishi. These policies previously aimed to encourage the development of domestic manufacturing capabilities based on internal combustion engines (ICE).

This move signals a significant shift in policy direction, as the government redirects its focus towards electric vehicle development and reconfigures its incentive system to promote sustainable transportation. The Philippines Department of Trade and Industry (DTI) announced this on 9/4.

Phasing Out the CARS Program

Trade Secretary Ma. Cristina A. Roque confirmed to local media that the government will terminate the Comprehensive Automotive Resurgence Strategy (CARS) program, along with successor initiatives such as the Revitalising the Automotive Industry for Competitiveness Enhancement (RACE) program.

Since its launch in 2015, the CARS program utilized a total of 27 billion pesos (approximately 450 million USD) in budget funds to support businesses, including Toyota with its Vios model and Mitsubishi with the Mirage.

CARS was implemented to boost domestic automotive and component manufacturing. However, the program was deemed costly in its efforts to revive a declining industry, causing the Philippines to lag as nations like Vietnam, China, India, and many European countries accelerate electric vehicle development.

Accelerating Electric Vehicle Development

Electric vehicles at a charging station in the Philippines. Photo: Manilatimes

To attract electric vehicle manufacturers, President Ferdinand Marcos Jr's government is accelerating the implementation of the Electric Vehicle Incentive Strategy (EVIS), which includes both financial and non-financial support.

According to Secretary Roque, this shift reflects the completion of the CARS program and a policy adjustment aimed at boosting electric vehicle production amid evolving global demand and rising fuel prices. "As the CARS program has concluded, we are transitioning to EVIS to accelerate the shift towards electric vehicles", she stated.

Previously, the automotive industry welcomed the funding commitment for CARS. However, the government's latest decision indicates that the Philippines is now prioritizing electric vehicles in its future automotive industry development strategy.

Ho Tan (via Gulfnews)