Building an automotive future

I’ve long wanted to write about this after the government flip-flopped on a planned automotive program, but the turmoil in the Senate and its dizzying iterations couldn’t wait. Obviously, our country has become too distracted by dirty politicking from power players desperate to hold on to their kingdoms – but that’s another story for another day.

For now, I’d like to put the spotlight on the Philippine automotive industry, taking off from the Marcos administration’s move to drop the proposed RACE program, or Revitalizing the Automotive Industry for Competitiveness Enhancement.

In April, Trade Secretary Cristina Roque said the government decided to drop the plan and focus on supporting EV manufacturing instead.

RACE, which was supposed to be the successor to CARS or the Comprehensive Automotive Resurgence Strategy program, had aimed to support the production of four-wheeled internal combustion engine vehicle (ICEV)models.

However, after the Middle East conflict erupted in February, which drove the surge in already sky-high fuel prices, Roque said the government wanted to fast-track the release of an EO on the Electric Vehicle Incentive Strategy (EVIS).

True enough, just last month, Finance Secretary Frederick Go said the program would soon be launched, adding that the blueprint had already been presented to President Marcos. The Board of Investments, he added, is still working with other agencies in the Fiscal Incentives Review Board on the details of the program.

What this shows is a dichotomized appreciation of two sub-industries of the automotive industry – EV and ICEV.

And framing the debate as EV vs ICEV misses the point. This is because a country that neglects and eventually weakens its existing manufacturing foundation before building a new one risks ending up with neither.

Both industries can actually coexist strategically during a realistic transition period.

This is the reason more developed countries have taken a multi-pathway approach involving EVs, hybrids and improved ICEV technologies. In a fast-moving world, technology, infrastructure and supply chains continue to evolve. And so does consumer readiness.

The road to electrification

The irony is that many of the capabilities needed for future EV manufacturing are the very same capabilities that today’s automotive sector is already developing – precision engineering, assembly operations, wiring systems, plastics manufacturing, logistics and workforce training.

To put it simply, the road to electrification may actually run through the industrial base we already have at present.

I should also add that the transition toward electrification should also consider the current realities of the Philippine automotive manufacturing ecosystem, including employment, supply chains, MSMEs, technical skills and existing industrial investments.

Government projections indicate that electrification will happen progressively in certain segments of the mass-market vehicle sector over the coming decades, not through an immediate full replacement of ICEV technologies.

According to the Philippine Comprehensive Roadmap for the Electric Vehicle Industry (CREVI) under the “Clean Energy Scenario,” 50 percent of new vehicle sales will be EVs by 2040.

This also means that 50 percent will be ICEVs. Therefore, there is equal opportunity to attract investments and develop local capabilities and strengths in ICEV manufacturing.

Employment engine

The Marcos administration must look at the situation carefully, especially because the automotive sector is a major employment engine in the Philippines, with industry estimates putting direct and indirect jobs at more than 500,000.

I’ll cite Toyota Motor Philippines because it’s the leading automotive company in the country.

The last time I checked, Toyota’s network alone supports up to 83,000 employees across 186 companies, most of them MSME suppliers.

Aside from employment, investor confidence is also important.

From the point of view of investors, policy consistency and balanced incentives remain important for maintaining investor confidence.

The government must send consistent signals. For instance, earlier discussions on the RACE program actually positioned the Philippines as a potential long-term manufacturing hub, particularly during President Marcos’ investment engagements in Japan in 2023.

But dropping the program two years later sends a confusing signal.

Perhaps continuing conversations around RACE alongside EVIS may help reinforce the message that the Philippines remains committed to developing a complete automotive manufacturing ecosystem rather than focusing only on one technology pathway.

Loving my EV

Don’t get me wrong. I have an EV, and I love it. But I am also well aware that the country’s EV adoption needs time, especially in terms of infrastructure readiness.

For all the benefits of EVs, let’s face it: charging infrastructure is still insufficient. This isn’t just true in the Philippines but in other countries, too.

A March 2026 article by S&P Global cited a 2025 S&P Global Mobility Electrification Consumer Survey covering nearly 8,000 respondents across eight countries.

“Around 65 percent of respondents say EV charging infrastructure is insufficient, although many expect improvement within five to 10 years. In the meantime, public charging reliability remains a sore point: 47 percent of EV owners report at least one problem using public chargers,” it said.

The point is that the Philippines should adopt a balanced transition that leverages current ICEV manufacturing strengths while gradually building EV capabilities, rather than treating EVs and ICEVs as competing technologies.

We have missed the boat on manufacturing too many times while our neighbors such as Thailand have grown their own. I hope the government finally learns from the mistakes of the past.

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Email: [email protected]. Follow her on X @eyesgonzales. Column archives at EyesWideOpen on FB.