Philippines to cut tariffs on electric vehicles, parts | Inquirer Business

Philippines to cut tariffs on electric vehicles, parts

By: - Reporter / @DYGalvezINQ
, / 03:36 PM November 24, 2022

MANILA, Philippines — The National Economic Development Authority (Neda) board, chaired by President Ferdinand Marcos Jr, on Thursday approved removing  tariffs on electric vehicles (EVs) to spur demand amid high fuel costs.

In a Palace briefing, Economic Planning Secretary Arsenio Balisacan said the Neda Board had endorsed an executive order to modify  the tariff rates on  e-vehicles such as passenger cars, buses, mini-buses, vans, trucks, motorcycles, tricycles, scooters, bicycles, among others.

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The executive order , according to Balisacan, will cut to 0 percent the most favored nation tariff (MFN) on EVs like passengers cars, buses, vans, trucks, motorcycles, and bicycles, and their parts for five years. Current import duties range from 5 percent to 30 percent.

He added that tariffs on certain parts and components would also be reduced from 5 percent to 1 percent for five years.

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“The EO aims to expand market sources and encourage consumers to consider acquiring e-vehicles, improve energy security by reducing dependence on imported fuel, and promote the growth of the domestic e-vehicle industry ecosystem,” the Neda chief said.

“We want to encourage the adoption and the use of e-vehicles because that will address pollution issues and adaptation to climate change. We believe that’s the future,” Balisacan further said.

He said the tariff rates would be reviewed after one year to assess their impact on the country’s e-vehicle industry.

Consumers in the Philippines currently need to shell out $21,000 to $49,000 for an EV, versus the $19,000 to $26,000 price for conventional vehicles.

Tariff rates on hybrid vehicles will not change.

Of the country’s more than five million registered automotives, only 9,000 are electric, mostly passenger vehicles, government data show. Personal EVs account for just 1 percent of the market, and are mostly owned by the extremely wealthy, data from the United States’ International Trade Administration show.

The Philippine  automotive sector relies mostly on imported fuel. It also buys oil and coal abroad for its energy generation needs, making it vulnerable to price volatility

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TAGS: Arsenio Balisacan, electric vehicles, NEDA, tariff rates
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