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

SEVENTEENTH CONGRESS
Second Regular Session

6018

HOUSE BILL NO.,

Introduced by HONORABLE STRIKE B. REVILLA

EXPLANATORY NOTE

AN ACT PROMOTING ENVIRONMENTALLY SUSTAINABLE TRANSPORT BY
PROVIDING INCENTIVES FOR THE MANUFACTURE, ASSEMBLY,
CONVERSION AND IMPORTATION OF ELECTRIC AND HYBRID VEHICLES
INCLUDING CHARGING STATIONS AND FOR OTHER PURPOSES

Explanatory Note

In a country that ranks among the world’s Top 10 most vulnerable countries to
climate change’, it is important to mainstream programs that mitigate climate change
risks while incentivizing climate change adaptation among the private sector,
communities, and individuals.

The use of electric and hybrid vehicles among individuals and organizations
presents such an opportunity. At present, the Philippine Department of Energy (DOE)
and the Asian Development Bank (ADB) awarded the contract to supply 3,000 electric
tricycles or E-Trikes to a consortium which is seen to catalyze the entry of more
efficient modes of public transport while the Electric Vehicle Association of the
Philippines (EVAP) envisions to mainstream 1 million electric vehicles by 2020.

In a study released by international consulting firm Grant Thornton in 2012,
“Asia is currently the largest market for hybrids/electrics (56%).”? Further: “The trend
toward alternative fuels is visible in global sales of hybrid electric vehicles (HEVs) and
battery electric vehicles (BEVs), projected to reach 5.4 million vehicles by 2021 (more
than 6% of the automotive market), up from 810,000 vehicles in 2010 (approximately
2% of market share).">

+ Romero, “Phi among world’s top 10 most vulnerable to climate change.” www. Philstar.com. Last accessed on
February 26, 2014: http://www. philstar.com/headlines/2013/10/30 1251165/phl-among-worlds-top-10-most-
vulnerable-climate-change

2 Grant Thornton,”Greener fleets: Companies consider alternative-fuel vehicles”, 2012

* Ibid.

1|Page


The same report states that, “Around a quarter of global companies (24%) have
introduced or are considering vehicles that run on alternative fuels for their businesses
...Companies in the ASEAN region (31%) were most likely to use or consider
alternative-fuel vehicles."*

Among the top reasons cited for ASEAN users to consider switching to
alternative fuel vehicles are the following: the “price of oil” (88%); “saving the planet”
(88%), “cost management” (81%), and “tax relief” (77%).

The study summarizes its findings this way: Rising oil prices and increasing
awareness of the environmental impact of traditional fuels make alternative-fuel
vehicles attractive to owners of commercial/business fleets. Government incentives
and regulations are also pushing executives to explore alternative fuels. Indeed, many
countries and states/provinces already offer significant incentives for buying or
converting to alternative-fuel vehicles; in some regions regulations will eventually force
the use of alternative fuels.”°

In the 15" Congress, both the Upper and Lower Houses of Congress passed
on Third Reading similar measures entitled: “An Act Providing Incentives For The
Manufacture, Assembly, Conversion And Importation of Electric, Hybrid and Other
Alternative Fuel Vehicles, And For Other Purposes.” Clearly, Congress recognizes that
the emerging industry of electric and hybrid vehicles can significantly contribute to
investment generation, job creation, poverty reduction, and the climate change
mitigation.

To follow through on this, this representation proposes stronger policy support
in order to promote adoption of and drive consumer demand for electric and hybrid
vehicles. In this regard, this Act provides fiscal incentives to drive consumer demand
as follows:

a. For Manufacturers and Assemblers: Nine (9) year exemption from payment
of excise taxes and duties in the manufacture or assembly of completely
knocked down (CKD) parts of electric and hybrid vehicles, including the
conversion of vehicles into electric and hybrid vehicles. Nine (9) year
suspension of VAT for purchases and importation of raw materials, spare
parts, components and capital equipment used in the manufacture or
assembly of electric and hybrid vehicles including charging stations For
Importers: Three (3) year exemption from payment of excise taxes and
duties for the importation of completely built units (CBUs) of electric and
hybrid vehicles;

b. Exemption from the Payment of Motor Vehicle User's Charge (MVUC)
imposed by the Land Transportation Office.

This Act also provides non-fiscal incentives to promote the mainstream use of
these vehicles as follows:

“Ibid.
+ Ibid, p.5.
* Ibid, p.2.



c. Creation of an Inter-Agency Task Force to resolve issues affecting the entire
supply chain of the electric and hybrid vehicle sector;

|. Priority in registration and issuance of plate number;

e. Priority in franchise application;
Exemption form Unified Vehicular Volume Reduction Program (UVVRP) or
Number-Coding Scheme;

.. Provision for free parking spaces in new establishments; and

. Land Allocation, zoning and utilization by Local Government Units (LGUs)
for electric and hybrid vehicle charging stations.

>oa

za

It is recognized that while the cost of electric and hybrid vehicles are higher
compared to those of regular vehicles, these incentives will make the adoption of these
vehicles more attractive to consumers and manufacturers alike.

As the world braces itself for stronger impacts of climate change while adapting
to swift changes in technology, it is imperative that Filipinos are not left behind in the
waves of change. Early adaptation to and promotion of electric and hybrid vehicles will
help the country mitigate the risks associated with climate change, while opening up
potential investment and job opportunities that will ultimately benefit more Filipinos.

In view of the foregoing, the passage and enactment of this bill is earnestly
‘sought.

REP. KE
2" District, er

3|Page


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

SEVENTEENTH CONGRESS
Second Regular Session

6018

HOUSE BILL NO.,

Introduced by HONORABLE STRIKE B. REVILLA

AN ACT PROMOTING ENVIRONMENTALLY SUSTAINABLE TRANSPORT BY
PROVIDING INCENTIVES FOR THE MANUFACTURE, ASSEMBLY,
CONVERSION AND IMPORTATION OF ELECTRIC AND HYBRID VEHICLES
INCLUDING CHARGING STATIONS 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 and Hybrid
Vehicles Including Charging Stations Promotions Act of 2017”.

SEC. 2. Declaration of Policy. - It is the policy of the State to safeguard life
and environment by encouraging the use of alternative sources 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 by reducing the impact of greenhouse gas effects
emitted from man-made sources such as vehicles 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, energy security and
conservation and to speed-up the deployment of cleaner technology.

C) The State recognizes the indispensable role of the private sector, encourages
private enterprise, and provides incentives to needed investments. To

4|Page


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 and hybrid vehicles including
charging stations.

SEC. 3. Definition of Terms. As used herein, the following shall mean:

a) 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.

c) Manufacturer or Assembler shall mean any individual, partnership, corporation or
‘other entity engaged in the manufacture, assembly and conversion of electric and
hybrid vehicles incorporated, organized and existing under Philippine laws.

d) Charging Station shall refer to the element in an infrastructure that supplies electric
energy for the recharging of electric and hybrid vehicles.

SEC. 4. Coverage. This Act shall cover electric and hybrid vehicles including
charging stations but shall not include vehicles powered by gasoline, petroleum, bio-
diesel and bio-ethanol.

SEC. 5. Strengthening Public-Private Partnership for the Promotion of
Electric Vehicles and Charging Stations. —- The Department of Trade and Industry
(DTI) shall strengthen its coordination with other government agencies by constituting
an Inter-Agency Task Force for the Promotion of Electric and Hybrid Vehicles Including
Charging Stations under the Industry Development Council to expedite identification,
prioritization, and resolution of issues affecting the entire supply chain of the electric
and hybrid vehicle industry by formulating a shared implementation plan and
monitoring system.

SEC. 6. Creation of Inter-Agency Task Force. — An Inter-Agency Task Force
shall be created to ensure proper implementation of this Act.

SEC. 7. Composition of the Inter-Agency Task Force. — The Task Force
shall be composed of the following members:

.. Secretary, Department of Trade and Industry — Chairperson
Secretary, Department of Transportation — Vice- Chairperson
Secretary, Department of Energy — Vice-Chairperson

Secretary, Department of Finance - Member

Secretary, Department of the Interior and Local Government — Member
Secretary, Department of Science and Technology — Member

. Three (3) Representatives from the Electric and Hybrid Vehicle Industry

e-eao0g9

5|Page


Representatives from other agencies of the government may be invited as

resource persons during the meetings of the Task Force.

SEC. 8. Duties and Responsibilities of the Task Force. — The Task Force

shall have the following duties and responsibilities:

1

Formulate modalities for easier access to financing capital expenditures,
operating expenses and retail operations of electric and hybrid vehicle and
charging station manufacturers and assemblers;

. Develop and implement standards which are aligned with international

standards to govern electric and hybrid vehicles including batteries and
charging infrastructures;

. Review and recommend policy to increase public transport applications for

electric and hybrid vehicles nationwide including their use for fleet operations
in national government agencies and local government units (LGUs);

.. Coordinate with LGUs in identifying and allocating land and property within their

jurisdiction for use as public charging stations for electric and hybrid vehicles;

. Review and recommend appropriate classification for electric and hybrid

vehicles and the corresponding parameters for Motor Vehicle Inspection
System (MVIS) approval;

. Coordinate with the electric power industry stakeholders, particularly, the

Energy Regulatory Commission (ERC) and electric distribution utilities and
cooperatives, in the preparation of their electric systems and network to
accommodate the connection of electric and hybrid vehicles charging
equipment and stations;

. Undertake Information and Education Campaign (IEC) on the economic, social

and environmental benefits on the use of electric and hybrid vehicles;

. Monitor resolution of issues affecting the electric and hybrid vehicle sector and

undertake actions as may be determined by the Inter-Agency Task Force; and

. Formulate modalities for easier registration of electric and hybrid vehicles and

coordinate with stakeholders regarding the same.

SEC 9. Incentives for 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 and hybrid vehicles including
charging stations shall be exempt from the payment of excise taxes and duties for nine
(9) years from the effectivity of this Act.

The imposition of Value Added Tax (VAT) for the purchase and importation of

capital equipment, spare parts, components used in the manufacture or assembly of

6|Page


electric and hybrid vehicles including charging stations shall be suspended for nine (9)
years from the effectivity of this Act.

SEC 10. Incentives for Importers. — The Provision of any special or general
law to the contrary notwithstanding, the importation of completely built units (CBUs) of
electric and hybrid vehicles shall be exempted from the payment of excise taxes and
duties for three (3) years from the effectivity of this Act.

SEC 11. Exemption from the Payment of Motor Vehicle User's Charge
(MVUC) — Electric and hybrid vehicles shall be exempt from the payment of the Motor
Vehicle User's Charge (MVUC) imposed by the Land Transportation Office (LTO)
under Republic Act No. 8794, otherwise known as “Motor Vehicle User's Charge
(MVUC) Act” for nine (9) years from the effectivity of this Act.

SEC. 12. Incentives for Users of Electric Vehicles and Charging Stations.

1. Priority in Registration and Issuance of Plate Number. — Registration and
renewal of registration of electric and hybrid vehicles shalll be prioritized by the
Land Transportation Office (LTO) for nine (9) years from the effectivity of this
Act. A special type of vehicle plate to be prescribed by the LTO shall be
exclusively issued to all electric and hybrid vehicles upon registration.

2. Priority in Franchise Application. - Public Utility Vehicle (PUV) operators
exclusively utilizing electric and hybrid 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.

3. Exemption from the Unified Vehicular Reduction Program (UVRP) or number-
Coding Scheme. — All electric and hybrid vehicles shall, for nine (9) years from
the effectivity of this Act, be exempted from the mandatory Unified Vehicular
Volume Reduction Program (UVVRP) or Number-Coding Scheme being
implemented by the Metro Manila Development Authority (MMDA) and other
local government units (LGUs) concerned.

4. Provision for Free Parking Spaces in New Establishments. - Business and
commercial establishments to be constructed after the effectivity of this Act are
mandated to provide exclusive parking spaces free of charge for all electric and
hybrid vehicles. No building permit shall be issued for the construction of
business and commercial establishments that include parking spaces unless
the owner submits an affidavit that there shall be free parking spaces to be
exclusively be designated for electric vehicles for nine (9) years from the
effectivity of this Act.

7|Page


5. Land Allocation, Zoning and Utilization by Local Government Units (LGUs) for
Electric and Hybrid Vehicle Charging Stations. - LGUs shall allocate land and
lot space for the construction of EV charging stations to encourage wider
deployment of electric and hybrid vehicles in their areas of jurisdiction.

SEC. 13. — Registration, Implementation and Monitoring. — The Department
of Finance (DOF) and Department of Trade and Industry (DTI) shall be responsible for
the administration and implementation of the incentives granted under this Act.

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

The Department of Transportation (DOTr) thru the Land Transportation Office
(LTO) is responsible for the registration and renewal of electric and hybrid vehicles.

SEC. 14. - Implementing Rules and Regulations. - The Department of
Finance (DOF) in coordination with the Department of Trade and Industry (DTI) and
the Department of Transportation (DOTr) shall promulgate the necessary rules and
regulations for the effective implementation of this Act.

SEC. 15. - Administrative Support. - The Department of Trade and Industry
(OTH) shall provide overall administrative support to the Task Force by appropriating
the corresponding budget needed for the effective implementation of its mandate.

SEC. 16.—/mplementing Rules and Regulations. — The Department of Trade
and Industry (DT!) shall promulgate the necessary rules and regulations.

SEC. 17. - Separability Clause. — If any provision of this Act is declared
unconstitutional or invalid, other parts of provisions hereof not affected thereby shall
continue to be in full force and effect.

SEC. 18.— Repealing Clause. All other laws, orders, issuances, circulars, rules
and regulations or parts thereof, which are inconsistent with the provisions of this Act
are hereby repealed or modified accordingly.

SEC. 19. Effectivity Clause. This Act shall take effect fifteen (15) days
following its publication in at least two (2) newspapers of general circulations or the
Official Gazette.

Approved,

8|Page