An executive order (EO) to enforce a zero-tariff policy for electric vehicles has been endorsed for the approval of the President, National Economic Development Authority (NEDA) Secretary Arsenio Balisacan said.
Balisacan revealed during a Palace briefing on Thursday, Nov. 24, that the executive order on tariff modification is up for President Ferdinand "Bongbong" Marcos Jr.'s approval and signing.
The move, he said, intends to reduce pollution in the country and address climate change.
"In particular, the EO will temporarily reduce the most favoured nation (MFN) tariff rates to zero percent for five years on completely built up (CBU) units of certain EVs, except for hybrid-type EVs," Balisacan said.
The EO also seeks to implement tariff modification on certain parts and components of EVs from five percent to one percent for five years.
It will be reviewed after one year, the NEDA chief said, to assess its impact on the development of the EV industry ecosystem.
According to Balisacan, the endorsed EO modifying tariff rates covers e-vehicles (EVs), such as passenger cars, buses, mini-buses, vans, trucks, motorcycles, tricycles, scooters, and bicycles, including EV parts and components.
Aside from addressing environmental concerns, the move also aims to encourage consumers to consider acquiring EVs, improve energy security by reducing dependence on imported fuel, and promote the development of the EV industry ecosystem.
"We want to encourage the use of e-vehicles because that will address pollution issues and our adaptation to climate change and we believe that's the future," he said.
"But more importantly, we want to be part of the value chain globally in this drive to get to this new industry, new growth drivers and hopefully we develop our own industries and this reduction of tariff is part of that building up ecosystem," he added.
The NEDA official said tariff modifications on e-vehicles have been enforced over the years, from 30 percent down to seven percent to five percent.
Traditional jeepney phase out?
Asked whether the move also aims to further the shift from traditional jeepneys to e-vehicles, Balisacan said it is not the main objective, but it will eventually lead to that.
"Hindi naman sa (It's not about the) pagpe-phase out but eventually this technology, these EVs become more popular and as prices for these vehicles become more competitive, eventually people will switch to these EVs," he said.
"As of now, as you may know, the costs are still quite high but technology is developing rapidly and this cost, including the battery, are going down," he added.
Once the EO is signed, the zero-tariff policy will be implemented. But Balicasan did not disclose when the President is expected to sign it.