As the Philippines moves toward its ambitious decarbonization goals, Senator Sherwin Gatchalian, chairman of the Senate Energy Committee, is pushing for review of the Electric Vehicle Industry Development Act (EVIDA) and the Motor Vehicle User’s Charge (MVUC) laws to grant more tax incentives and subsidies for electric vehicle (EV) users and infrastructure facilities of utilities firms.
Gatchalian, author of the EVIDA law, said at the opening of the Mober Central Charge, the country’s largest commercial EV charging hub owned and operated by businessman Dennis Ng, that the country’s timelines for EV adoption are not possible without additional government intervention.
The CREVI or the Comprehensive Roadmap for the Electric Vehicle Industry under the EVIDA has set a 10% EV adoption in the country by 2040 under business as usual scenario, and 50% by 2040 under the Clean Energy Scenario.
“CREVI is a tall order,” said Gatchalian. “It is not possible to hit the targets if there are no additional incentives or come-ons for them to transition to EVs.”
Gatchalian told reporters that achieving this target would require 7 million of the current 14 million vehicles on Philippine roads to be electric by 2040. Without stronger incentives and infrastructure investments, he warned that meeting the goals goal may not be feasible within the set timeframe.
Review of MVUC and EVIDA Laws
But he also said, “There are plenty of ways to improve the adoption of EVs in the country.”
One, Gatchalian stated that he would push for a review of the MVUC and the (EVIDA) laws.
Pursuant to the EVIDA, fully battery-operated EVs or pure EVs are currently granted a 100% exemption from excise tax, while hybrid vehicles are entitled to a 50% exemption.
On top of that, the Philippines also implemented a zero-tariff policy for imported EVs, including hybrids, until 2028 under the expanded Executive Order No. 12.
On MVUC, Gatchalian said that his committee is calling for the law’s review in the coming months. Pursuant to the EVIDA law, pure EVs are granted a 30% discount on MVUC and 15% discount for hybrids for eight years from the effectivity of the EVIDA law or until 2028.
While the planned review will consider an MVUC increase, Gatchalian is instead proposing a complete exemption for EVs and hybrids from MVUC payment.
On infra, Gatchalian noted the constraints on utilities companies, which he said have hard time keeping up with new technologies. “They need to upgrade, imagine people using EVs all over the country, so we have to incentivize and help the utilities companies,” he said.
Already, the EVIDA law author is mulling of having a special facility for EV upgrade for utilities firms. He would also push for an extension of the 2028 expiry on the incentives under EVIDA. “That’s three years from now, so let’s see if we can extend it and call for oversight to review the preparation and readiness for EV adoption. We have to make sure the utilities are ready, not just the buyers,” he said.
The senator noted that while EV adoption for individuals is gaining momentum, the private sector, particularly the logistics and businesses, are not as fast.
“So, we’re looking at how to incentivize businesses’ transition to EVs, like the small businesses’ ICE (internal combustion engines) vans move to E-vans,” he said.
