An executive order that grants P3 billion in subsidy to manufacturers of eco-friendly vehicles for public transportation is awaiting approval by President Duterte.
In her presentation at the “Open for Business” event hosted by the Philippine Trade and Investment Center yesterday, Trade Undersecretary Rafaelita Aldaba said the Eco-PUV program will give tax credits to manufacturers of Euro 4 and electric public utility vehicles (PUVs).
Aldaba said this is part of the Philippines’ strategy towards the development of the electrified public transportation sector.
She said the Philippines is projecting a total of 6.6 million EVs by 2030.
The subsidy is on top of the fiscal and non-fiscal incentives available under the current law as well as the newly-signed Corporate Recovery and Tax Incentives for Enterprises (CREATE).
“We are leveraging on our current strengths, and we are positioning the country, not only in EV assembly, but particularly in automotive electronics engineering services, outsourcing and EV battery charging energy storage systems and recycling,” Aldaba said.
The Philippines is also positioning the country as a global manufacturing hub for lithium ion batteries, given the rich nickel and cobalt resources in the country, which could be used as cathode materials. Currently, the country is number six in terms of nickel reserves in the world.
EV manufacturers could take advantage of the incentives provided under the current law that provides zero excise tax for battery EVs and 50 percent of the statutory rate for hybrid vehicles.
But under CREATE, they can enjoy up to 17 years of corporate income tax (CIT) holiday and special CIT rate or enhanced deduction and other incentives for EV assembly and parts manufacturing.
EV assembly, manufacture of strategic parts such as batteries charging equipment, automotive electronics; and high value automotive services will receive priority in the Strategic Investment Priorities Plan.
Companies can also import raw materials and capital equipment duty-free.
The Philippines has 54 manufacturers and importers and 19 charging stations and 11 parts manufacturers.
