THE Department of Trade and Industry (DTI) has issued an advisory on the possible local industry impact of the United States’ withdrawal of incentives for electric vehicle (EV) manufacturing.
The DTI, in an advisory posted by the Philippine Trade and Investment Center-Washington DC on its website on July 1, said, “all relevant industries and stakeholders—particularly those involved in EV manufacturing and supply chain operations — to consider conducting an early assessment of potential impacts and prepare appropriate risk mitigation strategies on the recently passed One Big Beautiful Bill Act (BBB) by the US Congress.”
The PTIC-Washington DC said House Resolution (HR) No. 1, or the BBB, recommends the termination of the federal tax credits for new clean vehicles, restricting eligibility for clean vehicle tax incentives.
“Noting that the Philippines is part of the EV supply chain, the BBB’s proposed changes may have an effect on the demand for the country’s green metals that feed into the EV supply chain in the US,” PTIC-Washington DC said in the advisory.
The trade office also extended the advisory to financial services companies as the BBB also imposes a 3.5-percent excise tax on overseas remittances sent by non-US citizens.
The PTIC-Washington DC said the BBB was sponsored and introduced by Representative Jodey Arrington on May 20, 2025, passed subsequently by the House on May 22.
Foreign media reports from Washington said the US Senate passed the bill on Tuesday on a narrow margin of 51-50 votes, with US Vice President JD Vance casting a final, tie-breaking vote. The package now goes back to the House for scrutiny.
The trade office cited the measure’s Section: 112002, which terminates clean vehicle credit as having a possible impact on the EV supply chain, such as automotive parts and automotive electronics.
Under the current law, US taxpayers can claim a tax credit of up to $7,500 for a new “clean” vehicle or EV, PTIC-Washington DC said. This tax credit applies to vans, sport utility vehicles, and pick-up trucks with a manufacturer’s suggested retail price (MSRP) of at least $80,000 and other clean vehicles with an MSRP of $55,000, it added.
While the tax credit is set to expire on Dec. 31, 2032 under the current law, the BBB, if passed, will terminate those incentives by the end of the year, the trade office said.
Based on the BBB’s provisions, only manufacturers that have not sold 200,000 units of new clean vehicles can qualify for the tax credit.
PTIC-Washington DC also cited Section 112003 of the BBB, which terminates qualified commercial clean vehicle credits, to have an impact on local EV parts and electronics industries.
Under the current law, US taxpayers can claim a tax credit of up to $7,500 for a clean commercial vehicle that was placed in service within the year. Clean commercial vehicles that are less than 14,000 pounds in weight can claim the $7,500 in tax credit, while those weighing more can claim up to $40,000, PTIC-Washington DC said.
Similar to non-commercial vehicles, this incentive is set to expire on Dec. 31, 2032.
According to PTIC-Washington DC, however, Section 112003 of BBB will accelerate the expiration date to May 12, 2025. Only clean commercial vehicles that were ordered or purchased on or before May 12, 2025 will be eligible for said tax credit.
On the excise tax on remittance transfer under BBB’s Section 112105, 3.5 percent will be collected by the remittance companies on each transaction made by a non-US citizen. At present, there is no excise tax on overseas remittance in the US.
Heads of the electronics and of the automotive parts associations declined to comment pending assessment but Michael Ricafort, chief economist at Rizal Commercial Banking Corp. in a text message said the removal of tax credits on EVs could slow down demand for EVs in the US and would have adverse impact on the global supply chains, including those in the Philippines.
Ricafort said this could also lead to some increase in demand for internal combustion engine vehicles that could benefit supply chains worldwide, including suppliers from the Philippines.
He echoed the government’s view that the impact of the proposed 3.5 percent tax on remittances will be relatively minimal in terms of the potential effect on the country’s current account, balance of payments, gross international reserves, local foreign exchange market, and on the overall economy.
