Government Revives RACE Program

Why It Matters

Reviving RACE balances the Philippines’ push toward electric mobility with immediate job preservation and investment in the domestic ICE vehicle sector, crucial for MSMEs and the broader manufacturing base.

Key Takeaways

• RACE revives incentives for ICE vehicle production in Philippines
• Program targets 200,000 units over six years, similar to CARS
• Toyota seeks to enroll its Tamaraw model under RACE
• EVIS will allocate roughly $1.1 billion in incentives for EV makers
• Policy shift aims to balance EV push with MSME vehicle needs

Pulse Analysis

The Philippines’ decision to resurrect the RACE program signals a pragmatic approach to automotive policy, acknowledging that a rapid shift to electric vehicles (EVs) may outpace the country’s current manufacturing capacity and the needs of micro, small and medium enterprises (MSMEs). By re‑introducing incentives for internal‑combustion‑engine (ICE) models, the Department of Trade and Industry (DTI) aims to sustain production lines that support essential services, such as the Tamaraw utility vehicle used by public safety agencies. This dual‑track strategy mirrors the earlier Comprehensive Automotive Resurgence Strategy (CARS), which successfully attracted major OEMs like Toyota and Mitsubishi by tying fiscal benefits to a minimum output of 200,000 units over six years.

Industry analysts view the RACE revival as a safeguard for jobs and local supply chains while the government prepares the Electric Vehicle Incentive Strategy (EVIS). The EVIS package, projected at roughly $1.1 billion, will target four EV manufacturers and cover battery‑electric, hybrid, and plug‑in hybrid models. By keeping both incentive streams active, the Marcos administration hopes to encourage capital investment across the spectrum of vehicle technologies, preventing a sudden vacuum that could jeopardize the sector’s competitiveness. Toyota’s expressed interest in enrolling its Tamaraw under RACE underscores the automaker’s desire for policy certainty and a level playing field for ICE and EV offerings.

In the broader context, the Philippines is positioning itself as a regional hub for diversified automotive manufacturing. The combined incentive framework could attract new joint‑venture projects, stimulate parts‑supplier ecosystems, and align the country’s industrial policy with ASEAN’s push for greener mobility. However, the success of this approach hinges on clear guidelines, transparent allocation of the EVIS funds, and the ability of local firms to scale up EV production without compromising the existing ICE market that still serves critical domestic needs.