Executive order on lower tariffs for e-vehicles up for mandatory review

The executive order granting lower tariff rates for electric vehicles, parts, and components is up for its mandatory review starting Wednesday, February 21, following a year of implementation.

Under Executive Order 12 issued by President Ferdinand “Bongbong” Marcos Jr., a review of the lower tariff rates for electric vehicles and their components — now at 0% import duty — was mandated.

The rates were in line with those imposed to Most Favored Nations (MFN), and compared to the previous 5% to 30% import duties, but exempts e-motorcycles which are still subject to 30% tariffs.

The order only exempts two-wheeled electric vehicles up to 250 watts with a maximum speed of 25 kilometers per hour from import duties.

“The MFN tariff rates shall be subjected to review after one year from the implementation of this Order,” the Executive Order, which was signed on January 13, 2023 and took effect on February 20, 2023, read.

“For this purpose, the NEDA (National Economic and Development Authority) shall submit to the President, through the Office of the Executive Secretary, its findings and recommendations on the matter,” it added.

A group advocating the use of electric vehicles (EVs) in the country has called on NEDA to recommend the inclusion of e-motorcycles in the EO.

"It's important to give them what's due them. We're looking forward and we also laud the humility of the NEDA, Rep. Salceda, and some people in the executive branch that they saw that this review is an opportunity to improve what has been delivered before," Electric Kick Scooter (EKS) Philippines co-founder Tim Vargas said. 

"But hopefully, moving forward, we need to have more stakeholder engagement and try to understand further rather than making this impulsive decision on just hastily passing things rather than being more constructive," he added.

NEDA Secretary Arsenio Balisacan last year said the mandatory review would focus on the possible inclusion of electric motorcycles in the import tariff exemption, as he said this would “help Filipinos choose sustainable means of transportation.”

“The inclusion of e-motorcycles in the import tariff incentives will take center stage once the mandatory review of Executive Order No. 12 Series of 2023 takes effect nine months from now,” he said last May.

Albay Representative Joey Salceda has filed a bill which aims to include electric vehicles in the list of electric transportation exempted from import duties, as these are the most affordable electric vehicles, and may be a possible solution to congestion.

"Some 60% of electric vehicles are two-wheeled, meaning that the vast majority of electric vehicles do not benefit from the tax incentives granted under the law... encouraging electric cars while locking out electric motorcycles does not address congestion issues, but merely substitutes petroleum-fueled cars for their space on the road," Salceda said.—with report from Sundy Locus/AOL, GMA Integrated News