EO 12 sets the stage for more EVs in PH

As the Philippines endeavors to undergo a green transport transition, the government is setting the stage to allow the entry of more electric vehicles (EVs) with the hopes of reaching the mass market.

Upon the recommendation of the Tariff Commission, the National Economic and Development Authority (NEDA) Board recently decided to open the tariff cuts provided by Executive Order (EO) 12 to more than just pure four-wheeler EVs.

This time, manufacturers of battery e-tricycles and quadricycles; battery, hybrid electric and plug-in hybrid electric jeepneys and buses; and hybrid and plug-in hybrid electric cars and trucks that are importing to the Philippines can avail of the reduced Most Favored Nation (MFN) rate.

“Executive Order No. 12 is designed to stimulate the EV market in the country, support the transition to emerging technologies, reduce our transport system’s reliance on fossil fuels, and reduce greenhouse gas emissions attributed to road transport,” said NEDA Secretary and Vice Chairperson of the Board Arsenio Balisacan.

EO 12 was made aligned with the goals of the Electric Vehicle Industry Development Act (EVIDA Law),  enacted in 2022, which is set as a framework for EV operations in the country from the charging stations, batteries, parts, components, and other related infrastructure.

President Ferdinand R. Marcos Jr. had directed stakeholders, particularly the Department of Energy (DOE) to strengthen the integration of EVs, especially to "strengthen the local manufacturing of EVs and supporting battery charging mechanisms."

The expansion of EO 12 will enable the country to realize the prediction of "over 6.6 million EVs used in the Philippines by 2030" said by the Electric Vehicle Association of the Philippines (EVAP).

Many groups had pushed for the expansion of the EO's coverage, particularly manufacturers of hybrid EVs. EVAP had also voiced its support for the inclusion of e-motorcycles in the tax break, since they were previously subject to a 30 percent tariff rate.

Balisacan said this year's review of EO 12 was made to "further structure the tariff regime so that we can have a more efficient competitive economy, so that we don't have cases where some industries have low tariffs for their outputs, for the outputs that they produce, but they face high tariffs for the inputs that they use for their production, effectively making them, losing competitiveness."

For hybrid EVs, the Department of Trade and Industry (DTI) had previously said that it preferred to prioritize the entry of pure EVs in order to justify the installment of more charging stations, which are not necessary to fuel hybrid EVs.

Despite their leanings, they still welcomed the decision of the NEDA Board, stating that the "move to maintain zero tariffs on a wider range of  EVs and hybrid EVs until 2028 aligns with our country's commitment to green transition and promotes the adoption of eco-friendly transportation."

"By making EVs and hybrid EVs more accessible and affordable, the government not only fosters sustainable mobility but also contributes to cleaner air and a healthier environment," DTI said.

The Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) also expressed its support for the decision on EO 12, stressing that automotive manufacturers are eager to provide wider EV options to the public.

“CAMPI adopts an inclusive approach to vehicle electrification, recognizing that all EV technologies – hybrid EV (HEV), plug-in EV (PHEV) and Battery Electric Vehicle (BEV) can contribute to the broader policy objectives of energy security and greenhouse gas emission reduction,” it said.

“The temporary reduction of the MFN tariff to zero percent until 2028 will help lower the upfront costs of EVs and improve EV adoption in the country,” it added.