The government is launching the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) Program to provide incentives to auto manufacturers.
This effort will support companies that produce vehicles locally, prioritizing energy-efficient and eco-friendly models.
The program is set to begin accepting applications in April or May 2025, with ₱9 billion allocated for financial support.
Unlike previous incentive programs, RACE will be implemented through a Joint Administrative Order between the Department of Trade and Industry (DTI), the Department of Finance (DOF), and the Department of Budget and Management (DBM), making the process smoother for participating manufacturers.
Program Background
The local automotive industry has long faced hurdles. Competing with imported vehicles, keeping local production alive, and shifting to sustainable models have been ongoing challenges.
The Comprehensive Automotive Resurgence Strategy (CARS) Program, launched in 2015, aimed to tackle these issues. While it provided incentives, it had its limits.
The program focused on mass production of certain vehicle models. This left little room for other manufacturers to benefit.
Only two companies, Toyota and Mitsubishi, met the strict requirements. As global demand for energy-efficient and sustainable vehicles grew, the local industry lacked a push towards greener technologies.
Enter the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) Program. It aims to attract more manufacturers, boost vehicle production, and promote cleaner, more efficient vehicles.
Building on the foundation of the CARS Program, RACE seeks to create a more inclusive and adaptable automotive industry. This new approach is better equipped to meet environmental standards and global market demands.
With the RACE Program, the government hopes to support a broader range of manufacturers. The goal is to encourage local investments and strengthen the country’s automotive sector. It’s all about making the local industry more competitive and ready for the future.
Legal Basis for the RACE Program
Recognizing the need for a more inclusive and adaptable program, the government formulated RACE as an alternative.
Rather than implementing it through an Executive Order, RACE is structured under a Joint Administrative Order (JAO).
This approach allows for faster implementation and easier adjustments, ensuring the program can evolve as needed.
The JAO is being finalized by the Department of Trade and Industry (DTI), the Department of Finance (DOF), and the Department of Budget and Management (DBM).
It is expected to be fully approved by mid-March 2025, paving the way for applications to open shortly after.
Who Can Apply for the RACE Program?
The RACE program is designed for automotive manufacturers willing to produce vehicles locally and meet specific production requirements.
To be eligible, companies must:
- Have a registered business in the country
- Manufacture passenger cars, commercial vehicles, or energy-efficient vehicles
- Commit to a set production volume
- Use a minimum percentage of locally sourced parts
Manufacturers already operating locally, such as Toyota Motor Philippines and Mitsubishi Motors Philippines Corporation, have shown interest in enrolling their models under RACE.
What Are the Benefits for Auto Manufacturers?
Companies that qualify for the RACE program can receive substantial financial and tax incentives, making local production more competitive.
Key benefits include:
- Fiscal Support: Manufacturers will receive a portion of the ₱9 billion fund allocated for the program.
- Tax Incentives: Reduced taxes on local production, making it more cost-effective.
- Priority in Government Plans: Companies producing eco-friendly vehicles may be given additional incentives under sustainability policies.
- Boosted Market Competitiveness: Locally produced vehicles may gain an advantage through government-backed promotion and local sourcing requirements.
These benefits are intended to lower manufacturing costs, encourage local investments, and strengthen the country’s automotive industry.
How Will RACE Be Implemented?
Instead of an Executive Order, the program will be managed through a Joint Administrative Order between DTI, DOF, and DBM.
This change makes implementation faster and more adaptable, allowing adjustments to be made as needed.
The application process is expected to open in April or May 2025, with the final administrative guidelines being finalized by mid-March.
Comparison with the Previous CARS Program
While both the RACE and CARS programs share a goal of boosting local vehicle manufacturing, there are key differences:
| Feature | CARS Program (2015) | RACE Program (2025) |
| Focus | Mass vehicle production | Sustainable & efficient vehicle production |
| Incentive Pool | ₱27 billion | ₱9 billion |
| Key Participants | Toyota, Mitsubishi | Open to more manufacturers |
| Production Target | 200,000 units | Flexible, depending on industry commitment |
| Policy Structure | Executive Order | Joint Administrative Order |
With RACE, there is greater flexibility, a broader range of eligible manufacturers, and a stronger focus on energy-efficient vehicles.
Key Perks Under the RACE Program
The RACE program provides ₱9 billion in fiscal support to participating car manufacturers (PCMs) who commit to local production.
Each PCM is eligible for up to ₱3 billion in financial assistance, provided they meet the program’s requirements.
Eligibility for Financial Incentives
To qualify, manufacturers must pledge to produce at least 100,000 units of a four-wheeled internal combustion engine (ICE) model locally.
This threshold is more flexible than the 200,000-unit requirement under the previous CARS program.
Toyota and Mitsubishi have already expressed interest in enrolling under RACE and are waiting for the finalized JAO and application opening.
Phased Release of Financial Incentives
The financial support is disbursed in three phases:
- First Tranche: Issued once the manufacturer produces its first 1,000 units.
- Second Tranche: Provided upon reaching 10,000 units.
- Final Tranche: Released after achieving 100,000 units.
This structure helps manufacturers manage production investments while ensuring compliance with the program’s objectives.
The Joint Administrative Order—signed by DTI, DBM, and DOF—will establish the official framework for these incentives.
Recent Updates
Quezon City’s New Centralized Vehicle Management System
The Quezon City government launched a centralized vehicle management system to improve efficiency. City hall departments now use 23 hybrid vehicles and three commuter vans for official tasks. This move aims to streamline internal processes and promote environmental responsibility. Hybrid vehicles, switching seamlessly between gasoline and electric power, promise savings on fuel and maintenance costs. The city’s Climate Change and Environmental Sustainability Department, in partnership with Clean Air Asia, monitors the project’s impact to support a cleaner, greener future. (PhilStar Global)
CCC Advocates for Green Economic Pathways
The Climate Change Commission (CCC) reaffirmed the Philippines’ dedication to climate action through green economic pathways. At the ‘2025 Sustainability Forum,’ held on January 31, key figures from government, business, and international organizations gathered to fast-track the country’s transition to a low-carbon economy. Secretary Robert E.A. Borje emphasized the importance of public and private sector collaboration to drive investments in renewable energy and green technologies. Borje reiterated the commitment to reducing greenhouse gas emissions by 75 percent under the Paris Agreement. He also stressed the need for a just transition plan to benefit workers and vulnerable communities during the shift to a sustainable economy. (PNA)
Video: DENR, opisyal nang inilunsad ang Green Economy Programme in the Philippines
The video discusses the launch of the Green Economy Programme by the DENR in the Philippines, focusing on sustainability, renewable energy, and waste reduction.
What’s Next for Auto Manufacturers?
With the application period opening soon, auto manufacturers should begin preparing their eligibility requirements and business plans.
Key next steps include:
- Monitoring Official Announcements – Stay updated on final program guidelines by mid-March.
- Assessing Production Capabilities – Make sure your company meets the local production and sustainability criteria.
- Exploring Partnerships – Identify opportunities for local sourcing of vehicle components.
- Consulting with BOI and DTI – Get insights on how to maximize benefits from the program.
For manufacturers looking to expand, modernize, or strengthen their local presence, the RACE program presents a great opportunity to invest in sustainable vehicle production.
Frequently Asked Questions
1. How long will the RACE program be available?
The program’s duration has not been officially confirmed, but it is expected to run for several years to support long-term industry growth.
2. Can foreign auto manufacturers apply?
Yes, but they must set up local production facilities and comply with sourcing and manufacturing requirements.
3. Will small-scale auto manufacturers qualify?
The program primarily targets large-scale manufacturers, but eligibility details will be clarified in the final administrative guidelines.
4. How does RACE support electric vehicle (EV) production?
The program prioritizes energy-efficient and eco-friendly vehicles, making it easier for EV manufacturers to qualify for incentives.
Conclusion
The RACE program marks a new chapter for the automotive industry, offering valuable incentives to manufacturers that commit to local, sustainable vehicle production.
With applications opening soon, now is the time for industry players to prepare and take advantage of this opportunity.