The Philippines’ Department of Trade and Industry (DTI) is promoting opportunities in the e-vehicle (EV) industry in the country. In a recent high-level roundtable meeting in Seoul, the DTI highlighted the several advantages to South Korean companies who are looking to explore relocation or expansion to the Philippines, particularly for Manufacturing of e-vehicles. These include wider market access for exporting companies from the Philippines through the preferential trade agreements the country has with the United States (GSP), European Union (GSP+), and the European Free Trade Association (EFTA) and Tariff modification of EV products under the ASEAN Free Trade Agreement
However, the International Electric Vehicle Association and other companies in the EV industry in South Korea, such as Hyundai Motor, POSCO E&C, and Phillips Group, are encouraging the Philippine government to provide additional support to attract more investors in the EV and parts industry, aside from the usual fiscal incentives. The association suggested tax holidays and monetary support per unit produced, as well as government cost-sharing in charging/battery replacement stations – a package similar to what is now being provided by the governments in South Korea and other ASEAN countries. These countries have local programs to strengthen the industry to encourage the shift to EVs, such as free registration and free parking for EVs.
The need to implement enabling programs is also shared by Japanese giant Nissan with concerns from other countries regarding the ease of getting government approval to put a high-power charging station. Currently, in the Philippines, while there is no single program that aims to consolidate support for EVs, Senate Bill 2137 or the Electric Vehicles and Charging Stations Act of 2018 is pending, which tasks the Department of Energy (DOE) not only to craft a roadmap for EV adoption, but also require distribution utilities to incorporate a “charging Infrastructure development plan” in the government’s power development plan. Moreover, there are also bills pending in the Philippine Congress which are mostly focused on non-fiscal incentives for EV adoption, such as priorities in registrations and free parking spaces. While the roadmap is still pending, presently, there are already several policies from different government agencies that are in place such as:
Executive Order 488 which provides zero tariffs for parts and components for EV and hybrid assembly;
The Public Utility Vehicles (PUV) Modernization Program which aims to make the Philippines’ public transportation system efficient and Environmentally friendly by 2020;
Provisions in the Tax Reform for Acceleration and Inclusion (TRAIN) law that grants exemptions in additional taxes and 50-percent tax rates for hybrid cars compared to non-hybrid automobiles; and
Additional incentives from DTI’s Bureau of Product Standards and in the investment priority plans of the Board of Investments.
The DTI’s initiative to promote e-vehicle Manufacturing in the Philippines is grounded not just on investors’ exporting opportunities, but also rising domestic demand. According to Frost and Sullivan, the potential for growth of EVs in the country mirrors the global trend. By the year 2025, the Philippines is expected to have 10,000 e-jeepneys (jeepneys or jeep are the most popular means of public transportation in the Philippines, originally made from US military jeeps left over from World War II), and about 200 charging stations. This is a big jump from the current number of 1,400 e-jeepneys and 19 known charging locations, most of which were put up with local government support and grants from external organizations. Meanwhile, electric bikes, scooters, and tricycles have evidently been increasing in number as the years pass. Electric cars though are still a rare sighting here in the country, however, in a 2018 Frost and Sullivan survey, results showed that almost fifty percent of potential car buyers in the Philippines displayed an openness to buying an EV, with main motivating factors such as better safety standards, charging flexibility and convenience and a battery range that is equal to a full tank (of gas).
The domestic market is currently served by about 30 Philippine-based companies, including parts manufacturers, e-vehicle importers and dealers and jeepney quad assemblies. Recognizing the potential of the EV market in the Philippines, recently Mitsubishi Motors Philippines Corporation (MMPC) announced checking the feasibility of introducing EV models in the country, as demand grows for more Environmentally-friendly cars. Moreover, in the upcoming 2019 Philippine Electric Vehicle Summit in July, Nissan, Mitsubishi, and Hyundai will showcase their innovations during the summit, while Motolite will also be making a big reveal of its new EV.
(Sources: BusinessWorld; Department of Trade and Industry, Philippines; Department of Energy, Philippines; Entrepreneur Philippines; Rappler; Senate of the Philippines; TopGear)