A three-year expansion of the Comprehensive Automotive Resurgence Strategy (CARS) program is under study by the Department of Trade and Industry (DTI), with prospects of requiring participating automotive firms to enroll another vehicle model as prerequisite for the extension.
“We are still firming it up so we can propose a definite scheme to the FIRB (Fiscal Incentives Review Board),” Trade Undersecretary Ceferino Rodolfo told reporters on Wednesday, when asked about the duration of a possible extension.
Toyota Motor Philippines Corp. (TMPC) and Mitsubishi Motors Philippines Corp. (MMPC) qualified for incentives under the CARS program, which was signed in 2015 under an arrangement that both firms would locally produce 200,000 units of the Toyota Vios and the Mitsubishi Mirage models in a period of six years.
The Philippines government allotted P27 billion for fiscal incentives under the program.
The two started production in 2018, with both automotive firms sourcing 42 percent of the car components and parts locally.
TMPC has already produced 134,242 Vios units while MMPC has manufactured 72,923 Mirage to date, according to the trade official.
Under the CARS program, the two automotive firms have created a total of 109,959 jobs so far and invested P9.6 billion.
Based on a six-year life of CARS, the government is expected to generate an estimated net revenue of P18.77 billion from income tax, value-added taxes and withholding tax payments.
Earlier last month, the trade official said that an extension had been considered during the last administration. However, concerns had been raised whether to include it in the Corporate Recovery and Tax Incentives for Enterprises Act or implement it through an executive order.
A third slot is also considered for the electric vehicles industry, according to the trade official, with more details on this prospect expected to be included in an industry road map estimated to be issued sometime in 2023.