Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

Eighteenth Congress

First Regular Session
House Bill No. 1432

Introduced by Honorable Luis Jose Angel N. Campos, Jr.

EXPLANATORY NOTE

One of the policies enshrined in the Constitution is the right of the people to a balanced a
healthful ecology. Section 16, Article II, provides to wit:

The State shall protect and advance the right of the people to a balanced and
healthful ecology in accord with the rhythm and harmony of nature

The carbon dioxide emission of motor vehicles is a key contributor to the greenhouse
gases released to our atmosphere which in turn contributes to global warming. Some of the
adverse effects of global warming are a continuous rise in the overall temperature of the earth,
climate change, more extreme weather conditions and increases in the sea level. The current
President of the United States, Barack Obama, believes that no challenge poses a greater threat to
our children, our planet, and future generations than climate change

This bill seeks to help combat climate change and the adverse effects of global warming
caused by the emission of fossil fuels by giving tax incentives to hybrid car manufacturers. Such
tax incentive would allow more Filipinos to afford and use hybrid cars, and the increased
availability and use of hybrid cars in the Philippines instead of the regular cars that run on fossil
fuel will help reduce the carbon dioxide emission of the Philippines, thus there is less global
warming and less pollution.

In view of the foregoing, the approval of this bill is earnestly sought.

LUIS JOSE ANGEL N. CAMPOS,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Eighteenth Congress
First Regular Session

House Bill No. 1432

Introduced by: Hon. Luis Jose Angel N. Campos, Jr.

AN ACT
PROVIDING INCENTIVES FOR THE MANUFACTURE, ASSEMBLY, CONVERSION
AND IMPORTATION OF ELECTRIC, HYBRID AND OTHER ALTERNATIVE FUEL
VEHICLES AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. TITLE. - This Act shall be known as the “Electric, Hybrid and other
Alternative Fuel Vehicles Incentives Act of 2013.

SEC. 2, DECLARATION OF POLICY. - itis the Policy of the State to safeguard life
and environment by encouraging the use of alternative source of energy for vehicles intended for
public and private use. To protect the well-being and promote the economic condition of the
people as well as to promote energy independence and security in the midst of development and
innovation in technology, the following are hereby declared:

(a) It is the policy of the State to protect and advance the right of the people to a

balanced and healthful ecology in accord with the rhythm and harmony in nature.
The State shall recognize and address the detrimental effects on the environment,
safeguard the welfare and protect the health of the people by improving air quality
and reducing the impact of greenhouse gas effect emitted from man-made sources
such as vehicle operating on fossil fuels;

(b) The State supports the need to promote the development of new technology to
accelerate social progress and promote human development. The use of alternative
sources of energy on vehicles intended for public and private use is encouraged to
Promote innovation, energy efficiency, security and conservation, and to speed up the
deployment of cleaner technology; and

(©) The State recognizes the indispensable role of the private sector, encourage private
enterprise and provides incentives to needed investments. To accelerate economic
growth and generate employment, the State shall provide incentives to private
enterprises and individuals engaged in the manufacture, assembly, conversion and


importation of electric, hybrid and other alternative fuel vehicles.

SEC. 3. DEFINITION OF TERMS, - As used herein, the following shall mean:

(@) Electric Vehicle (EV) shall refer to any vehicle that uses electric motors solely for
propulsion.

(b) Hybrid Vehicle (HV) shall refer to any vehicle that combines the technologies of
using internal combustion engine (ICE) with a battery-powered electric motor to
gain advantages of both propulsion systems.

() Other Alternative Fuel Vehicle (AFV) shall refer to any vehicle using alternative
sources of energy such as but not limited to: solar, wind, hydrogen fuel cell,
compressed natural gas (CNG) or liquefied natural gas (LNG) and liquefied
petroleum gas (LPG), other than conventional sources of energy like petroleum and
gasoline for propulsion.

() Manufacturer or Assembler shall refer to any individual, partnership, corporation or
other entity engaged in the manufacture, assembly and conversion of electric, hybrid
and other alternative fuel vehicles incorporated, organized and existing under
Philippine laws

(€) Importer shall refer to any individual, partnership, corporation or other entity
engaged in the importation of completely built units (CBU’s) of electric, hybrid and
other alternative fuvel vehicles incorporated, organized and existing under Philippine
laws.

SEC. 4. Coverage. — This Act shall cover electric, hybrid and other alternative fuel
vehicles but shall not include vehicles powered by gasoline, petroleum, bio-diesel and bio-
ethanol,

SEC. S. Incentives to Manufacturers or Assemblers. - The provision of any special or
general law to the contrary notwithstanding, the manufacture or assembly of completely
knocked-down (CKD) parts of electric, hybrid and other alternative fuel vehicles, including the
conversion of vehicles into electric, hybrid and other alternative fuel vehicles, shall be exempt
from the payment of excise taxes and duties for nine (9) years from the effectivity of this Act

The importation of raw materials, spare parts, components and capital equipment used in
the manufacture, assembly or conversion of electric, hybrid and other alternative fuel vehicles
shall be exempted from the payment of valued-added tax (VAT) for nine (9) years from the
effectivity of this Act.

The sale of raw materials, spare parts, component and capital equipment used in the
manufacture or assembly of electric, hybrid and other alternative fuel vehicles, including the
conversion into such vehicles, shall be subject to zero Percent (0%) VAT rate for nine (9) years
from the effectivity of this Act.

SEC. 6. INCENTIVE TO IMPORTERS. —The provision of any special or general law
to the contrary notwithstanding, the importation of CBU’s of electric, hybrid and other


alternative fuel vehicles shall be exempt from the payment of excise taxes and duties for nine (9)
years from the effectivity of this Act

SEC. 7. EXEMPTION FROM THE PAYMENT OF MOTOR VEHICLE USER'S
CHARGE (MVUQ. - Electric, hybrid and other alternative fuel vehicles shall be exempt from
the payment of the MVUC imposed by the Land Transportation Office (LTO) under Republic
Act No. 8794, otherwise known as “Motor Vehicle User’s Charge (MVUC) Act”

SEC. 8 NON-FISCAL INCENTIVES ~ PRIORITY IN FRANCHISE
APPLICATION. ~ Public Utility Vehicle (PUV) operators exclusively ul
and other alternative fire! vehicles shall be granted priority by the Land Transportation
Franchising and Regulatory Board (LTFRB) in the approval of applications for franchise to
operate, including its renewal, for nine (9) years from the effectivity of this Act

SEC. 9. REGISTRATION, IMPLEMENTATION AND MONITORING - The
Department of Finance (DOF) and the Department of Trade and Industry (DTI) shall be
responsible for the administration and implementation of the incentives granted under this Act.

Manufacturers, assemblers, converter and importers of electric, hybrid and other
alternative fuel vehicles shall register with the DOF in order to avail of the incentives provided
under this Act. For proper monitoring, the DOF and the DTI shall meet regularly to monitor and
review the implementation of the incentives provided herein.

SEC. 10. Implementing Rules and Regulations. — The DOF, in coordination with the
DTI, shall promulgate the necessary rules and regulations for the effective implementation of this
Act.

izing electric, hybrid

SEC. 11. SEPARABILITY CLAUSE. - If any provision of this Act is subsequently
declared invalid or unconstitutional, the other provisions hereof which are not affected thereby
shall remain in full force and effect

SEC. 12, REPEALING CLAUSE. — All laws, acts, presidential decrees, executive
orders, issuances, presidential proclamation, rules and regulations or parts thereof which are
contrary to or inconsistent with any provision of this Act are hereby repealed, amended or
modified accordingly.

SEC. 13, EFFECTIVITY CLAUSE. — This Act shall take effect fifteen (15) days after
its publication either in the Official Gazette or at least two (2) newspapers of general circulation.

Approved,