Cutting off our nose to spite our face?

Vetoing fiscal support for CARS is not how to make amends for the flood control mess we’ve found ourselves in

IT’S NO SECRET that many of our public servants are wont to erase — at the very least downplay or dim — the legacy of those previously in power. For whatever motivation, it seems that attributable good deeds are the only ones worth mentioning or pursuing. When I say attributable, I mean attributable to the incumbent. There’s no malice to that statement; only an observation of someone who’s seen it happen again and again — from the barangay level to the highest positions in the land. I’ll get back to this thesis later.

Last week, President Ferdinand “Bongbong” Marcos, Jr., as reported by BusinessWorld’s Chloe Mari A. Hofana with Justine Irish D. Tabile, signed the year’s P6.793-trillion national budget while vetoing “around P92 billion worth of unprogrammed appropriations amid heightened scrutiny over public spending as authorities probe a graft scandal.” According to BBM, the move is to “ensure that public funds are expended in clear service of national interests.”

If you’ve been following the news, it’s easy to understand what brings about the judiciousness and prudence (i.e., extra care). Confidence in government — if satisfaction ratings are to be believed — is at an all-time low, particularly for the Chief Executive. ABS-CBN News reported last December that public opinion firm WR Numero, in a non-commissioned survey, revealed an approval rating score of 21% — a 14-point freefall from a similar poll in August 2025. The same survey of 1,412 Filipinos also showed a dissatisfaction rate of 47% in BBM’s performance.

Despite the small sample size, this is still distressing, and should be disturbing enough for a government still far from running its final lap.

If we take this pronouncement on its face, it does make sense: Excise the tumor, get on the path to health. But the thing is, what if a cut takes out a vital organ?

That certainly appears to be the case with Republic Act No. 12314 or the 2026 General Appropriations Act (GAA), which “vetoed the allocation for fiscal support under the CARS program,” reported BusinessWorld.

As a refresher, the CARS program (or Comprehensive Automotive Resurgence Strategy) was signed into law as EO 182 in 2015 by the late President Benigno “Noynoy” S.C. Aquino III — a move seen to boost the Philippine automotive industry by “attracting new investments, stimulate demand, and effectively implement industry regulations that will revitalize the Philippine automotive industry,” according to the Board of Investments then. Significantly, CARS was also intended to “develop the country as a regional automotive manufacturing hub.”

Two companies signed on for the program; no surprise that these are the two biggest-selling auto marques in the country, Toyota Motor Philippines Corp. (TMP) and Mitsubishi Motors Philippines Corp. (MMPC). In exchange for locally producing at least 200,000 vehicles of enrolled vehicles (the Toyota Vios and Mitsubishi Mirage) each over a period of six years, Toyota and Mitsubishi were qualified to receive fiscal incentives totaling about P27 billion.

The six-year duration of the program unfortunately ran through the gauntlet of the COVID-19 pandemic, which severely curtailed activities across all aspects of life — including auto manufacturing and sales. While this was a major blow, TMP was still able to cross the 200,000 finish line in April 2024. On account of the pandemic, the prescribed period of completion was moved to the end of that year.

A day after learning of the veto, TMP President Masando Hashimoto delivered a statement. “Toyota Motor Philippines (TMP) shares and supports the same objectives with the Philippine government on nation-building through its participation in the CARS Program,” he began. “TMP made major investments to meet the target of 200,000 units of the Toyota Vios within the… time frame… We believe it has been a win-win concept between government and private sector in attracting foreign direct investments and at the same time provided benefits to the manufacturer and the consumers.”

This declaration revisits and reiterates the virtues of CARS not just for TMP itself but for countless people who benefited from the manufacturing activity — not to mention the contribution to national coffers.

Obviously, we won’t be expecting TMP to straight up and ask the government to give it what it is owed, even if the company has the right to do so. To be honest, it shouldn’t be a dealbreaker for TMP, the country’s leading automaker by a mile. But, hey, a promise is a promise, right?

I also reached out to MMPC for a comment on the matter and an executive said that they “will issue a statement soon.” It would be reasonable to anticipate a similar line from company leadership.

Meanwhile, a recent press release from the Philippine Parts Makers Association (PPMA) was a laser beam, saying it is “sounding the alarm following the President’s veto of the proposed budget for (CARS) and (even) the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) programs.” The decision to do so “threatens what remains of local vehicle manufacturing in the Philippines” and “directly affects whether cars will continue to be built in the country at all.”

RACE, the current government’s version of CARS (though yet to be signed), promises similar fiscal support for local manufacturers of enrolled vehicles. The target this time is 100,000 per participating company. A source from TMP maintained that the company is still keen on joining the program — primarily through the Tamaraw — if it pushes through, but Toyota will go on producing the workhorse here “with or without the incentives.”

Meantime, PPMA President Ferdi Raquelsantos averred, “CARS and RACE are critical to the survival of local car manufacturing. Without sustained production volumes, there is no viable auto parts industry, and without parts makers, vehicle assembly cannot survive.”

Even the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI), the country’s biggest and preeminent automotive group representing almost 30 car brands, has weighed in on the development, stressing the “importance of collaboration between government and industry in securing the future viability of the Philippine auto manufacturing sector.” It added, “Such is crucial in creating a positive environment for future investments and help develop a more robust local auto parts manufacturing industry.”

CAMPI also stressed how “(CARS) participants should be able to receive their incentives based on their actual performance that already generated economic benefits.”

A ray of hope exists in the pronouncement of Board of Investments (BoI) Managing Head Ceferino Rodolfo, stated Context.ph. The agency is “coordinating closely with other government offices, particularly the Department of Budget and Management (DBM), to identify a mechanism that will ensure the payment of outstanding fiscal support amounting to P3.9 billion.” The “unprogrammed appropriations” take into account the delivered performance commitments in order to find funding through excess funds or savings.

I’m sure we can all agree that Filipinos want justice served for those guilty of filching funds meant to help us wage a war versus the effects of climate change — namely, flooding. The obscene level of corruption could have helped so many in high-risk areas, but instead lined the filthy pockets of a few and enabled them to live like royalty.

But to save up (and save face) by reneging on legitimate obligations made by the state — regardless of who was in power at the time these were forged — perpetuates and promotes the tired practice of legacy erasure — not to mention curtailing trust in the government whose main concern, particularly at the moment, should be to restore confidence in it. The government can’t maintain a “what, me, worry” attitude at this point because it feels it has no ownership of a running program. I’m not saying this is the case but, given the lessons of history, there’s always that niggling doubt.

At the end of the day, who would want to invest in a country whose government makes promises it can’t deliver on?

“Automotive manufacturing has always been a core industry in Southeast Asia,” Mr. Raquelsantos continued. “When you lose local assembly, you lose the ecosystem that supports it. That includes tooling, testing, engineering, and thousands of skilled manufacturing jobs.”

Concluded Mr. Hashimoto: “We would like to underscore how sustained government support through industry development programs such as CARS is critically important for competitiveness as observed in the region. We hope for continued mutual trust and collaboration with the government to attract future investments, generate employment, enhance technology transfer, strengthen domestic parts makers and ensure a vibrant manufacturing environment in the Philippines.”

That’s not a hard scenario to sign up for.