EO extending CARS program compliance expected by June

MANILA, Philippines — An executive order (EO) that would extend for three years the period for automotive firms to comply with production targets under an incentives program for the automotive industry is expected to be released by June this year, the Department of Trade and Industry (DTI) said.

“We are confident that an EO on the recommendation of the IAC (Interagency Committee) for the extension of the compliance period for the CARS (Comprehensive Automotive Resurgence Strategy) program participants will be issued before end of June,” Trade Undersecretary and Board of Investments managing head Ceferino Rodolfo told reporters.

He said the IAC, which includes the DTI, Department of Finance, Department of Science and Technology and Department of Transportation, are working on the EO.

“It only involves the extension of the period of compliance, but the volume requirements remain intact and the notional budget caps,” he said.

Under EO 182 issued by then president Benigno Aquino III for the CARS program, the government offers fiscal support to participants in exchange for investments for the production of at least 200,000 units of their enrolled vehicle model within six years.

An enrolled model is qualified to a fiscal support amounting to P9 billion.

The CARS program is being implemented to attract new investments and develop the country as a regional automotive manufacturing hub.

Toyota Motor Philippines Corp. (TMP) has the Vios as its entry in the CARS, while Mitsubishi Motors Philippines Corp. has enrolled the Mirage.

Rodolfo said both participants have not received a single centavo from the government, but have already made investments and are producing the units.

He said the recommendation to extend the period to meet volume requirements under the CARS program is being made, as the government recognizes the challenges faced by the participants.

“We, of course, do understand the challenging unforeseen circumstances, including the impact of the pandemic on the automotive demand,” he said.

Rommel Gutierrez, first vice president for corporate affairs at TMP, earlier sought an extension of the period to comply with the CARS production target given recent events that affected demand for vehicles.

In particular, the Taal Volcano’s eruption last year, as well as the ongoing pandemic have led to weak demand for cars.