DTI proposes P83B incentive package for electric vehicle sector

The Department of Trade and Industry proposed an P83-billion incentive package to support the local manufacturing of electric vehicles.

Trade Undersecretary Rafaelita Aldaba said in a webinar Tuesday the support to the e-vehicle subsector would come in the form of production assistance and consumer subsidy.

“What we are proposing is the implementation of the electric vehicle incentive strategy, and it is being included in the EV bill of Senator Win Gatchalian. The objective is to provide time-bound, targeted, performance-based perks and transparent fiscal and non-fiscal support in order to attract EV and EV parts manufacturing, particularly electronic parts and other strategic components, batteries, charging stations and the establishment of testing facilities in terms of the production support,” Aldaba said.

The American Chamber of Commerce and Industry of the Philippines organized the webinar as a part of a series of virtual discussions on legislative measures and updates.

The government aims to provide around P30 billion in fiscal support to manufacturers of public utility vehicles and buses, trucks and passenger cars, battery, auto electronics and charging stations on top of an initial package of P53 billion fiscal support for buyers of EVs.

Manufacturing of non-EV vehicles would continue to enjoy income tax holiday and other perks that the government was offering.

The Philippines is expected to have a stock of 36 million units of motor vehicles by 2030 and 6.6 million of these would be EV. At least half of the projected inventory of EV will be locally-manufactured, Aldaba said.

“We are targeting to manufacture 100 percent adoption rate for PUVs, trucks and 3-wheelers, 50 percent for e-buses and 2-wheelers, 23 for UVs other than PUVs and 3 percent for passenger cars.

Sales of plug-in hybrid electric vehicle are still small in the Philippines, with only 54 manufacturers and importers, 19 charging stations,11 parts manufacturers, 18 dealers and traders. The industry employs 71,840 workers, both direct and indirect.

Under the Electric Vehicle Incentive System, the industry will be given access to fiscal and non-fiscal support to enable the traditional motor vehicle system to shift to EV and jumpstart the development of the EV industry.

A pre-COVID survey conducted by Frost and Sullivan covering ASEAN countries showed out that 46 percent of Filipinos were eager to buy electric vehicles. 

Tax waiver and the presence of charging stations were the top incentives cited for ASEAN buyers of EVs.

Aldaba said that prior to the epidemic, the governments was gearing their policies and building the momentum towards the EV sector development. 

“With COVID-19, all the more countries have been moving in the same direction to a low-carbon economy, using their stimulus packages to invest heavily in EV in public transit as a way to repair the vast amount of economic damage caused by the crisis, and get their citizens back to work. The Philippines is expected to contract by 2 to 3.4 percent, according to official estimates while private think tanks predict a 5.6 percent to 7.1 percent contraction, over the course of 2020,” she said.

“So our economic recovery and stimulus plans should take into account jobs and growth  in low-carbon and sustainable sectors, and that future economic competitiveness will come from new technologies and business models in these sectors, and we want the Philippines to prepare,” she said.