The government will earmark PHP9 billion as fiscal support for participating car makers (PCM) under the proposed Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program, which will be implemented through a Joint Administrative Order (JAO).
In a document shared by Board of Investments (BOI) Executive Director Ma. Corazon Halili-Dichosa to trade reporters, RACE targets to cover three specific models of four-wheeled internal combustion engines (ICE) that will pledge to locally manufacture 100,000 units.
This rule is more relaxed than the 200,000-unit minimum requirement of the previous program, the Comprehensive Automotive Resurgence Strategy (CARS).
“Both Toyota and Mitsubishi signified their intention to enroll under RACE. Just waiting for the JAO and opening of application period,” Halili-Dichosa said.
The RACE program briefer said each qualified PCM is entitled to get a fiscal support not exceeding PHP3 billion.
“Each PCM may be entitled to avail of the Fixed Investment Support (FIS) equivalent to not more than 40 percent of capital expenditure,” the document read.
To get the fiscal incentives, there should be new investments in the production of the enrolled model, which shall be introduced in the market within two years.
A PCM should also continue meeting the program’s criteria and attain other conditions to be imposed at the time of registration.
The government will also release the FIS as soon as the qualified carmaker produces its first 1,000 units.
The second tranche will be given after the production of the first 10,000 units, and the last tranche will be provided until the 100,000 units will be met.
“We’re expecting to complete the JAO by mid-March and open the application period for participants by April or May this year,” the Department of Trade and Industry (DTI) said in a Viber message.
The Department of Budget and Management, the Department of Finance, and the DTI will be the signatories of the JAO for the RACE program. (PNA)
