The Philippine government is facing scrutiny from the nascent EV industry and critics alike for failing to include two-wheel vehicles in the zero tariff provisions as implemented under Electric Vehicle Industry Development Act (EVIDA).
The law, passed in April 2022, outlines a comprehensive roadmap for the development of the EV industry in the Philippines, laying down its regulatory and operations framework.
Under the law’s implementing rules and regulations (IRR), only two-wheel EVs were not granted zero tariff whereas all other forms of EVs were included, raising protests among industry players and the public. Thus, a 30% tariff burden continues to be imposed on two-wheel EV companies, making the price of these vehicles comparatively higher than diesel and regular combustion engines. Could this be the outcome of an intense lobby from Japanese vehicle manufacturers perhaps?
The two-wheel motorcycle happens to be the most inexpensive and ride-friendly vehicle for ordinary Filipinos, similar to Vietnam and Taiwan. Curiously, the inequitable tariff has brought undue advantage to Japanese manufactured two-wheel fossil fuel motorcycles, which are very popular in the country.
In fact, two-wheel motorcycles outnumber any other kind of vehicle in the Philippines, accounting for 60.67 percent of the total 13.89 million vehicles registered by the end of 2022, according to government data.
This should serve an impetus to fix regulatory gaps.
“Clearly there is demand. Our inadequate mass transportation system, the high cost of fuel, and the desire of an increasing number of Filipinos to do more for the environment are making them look at other options to get themselves from Point A to Point B,” said former Quezon City Rep. Christopher Belmonte, co-convenor of citizen rights group CitizenWatch.
“There needs to be a review of existing regulations that should be updated and harmonized with the government’s sustainability agenda wherein shifting towards zero emissions is not just a national but a global strategy to prevent the catastrophic effects of climate change. The government, the stakeholders of the EV (electric vehicle) industry, and local governments need to iron out these policy kinks to accelerate the shift to green transportation modes,” he added.
Even thinktank Stratbase ADR agrees, saying regulations should enable access to affordable and sustainable forms of transport.
“E-motorcycles' inclusion in the tax breaks would not only help ease traffic, be more economical, and reduce the reliance on fossil fuel, but will also help Filipinos choose "to do the environmentally right thing" while addressing their transportation and mobility needs," Stratbase ADR Institute President Professor Dindo Manhit said.
Bernie Llamzon, President and CEO of Gogoro Philippines, which recently launched a one-of-a-kind EV ecosystem in Metro Manila, said amending EVIDA will not only revolutionize the landscape of sustainable transport but also catalyze economic growth and job creation nationwide.
“The fiscal incentives, once they are adjusted, corrected, and rectified, will surely help in the business viability of the companies engaged in the selling and distribution of the two-wheeled EVs. This drives faster adoption of EVs in the Philippines, and with faster adoption, there’s scale,” he said.
By incentivizing the adoption of EVs, the amendment is expected to stimulate demand, spur investment, and create job opportunities across the value chain.
“We all know scale becomes an attraction to do local assembly of these EVs here in the country. With local assembly, there will definitely be jobs for the ordinary Filipino,” adds Llamzon.
As the Philippines navigates the transition towards a greener and more sustainable future, amendments to legislation such as the EVIDA are instrumental.
This begs the question, is the Philippines really committed to riding the wave of clean energy and environmental protection that is taking the world by storm? As new businesses arise from ESG practices, is the country ready to capitalize on the opportunities of sustainable development and innovations?