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

EIGHTEENTH CONGRESS
First Regular Session

444
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

Exp! ry Note

Ina 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.

Ina 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.


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
‘ompanies 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 Altemative 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:
c. Creation of an Inter-Agency Task Force to resolve issues affecting the entire supply
chain of the electric and hybrid vehicle sector;
d. Priority in registration and issuance of plate number;
e. Priority in franchise application;



f. 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.

re

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. ST! B. REVILLA
4 District, Cavite



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

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 444

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) Itis 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 accelerate economic
growth and generate employment, the state shall provide incentives to private

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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 (DT!) 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

eRmeeae gp

Representatives from other agencies of the government may be invited as resource
persons during the meetings of the Task Force.

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ibilities 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;

2. Develop and implement standards which are aligned with intemational standards to
govern electric and hybrid vehicles including batteries and charging infrastructures;

3. 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);

4. Coordinate with LGUs in identifying and allocating land and property within their
jurisdiction for use as public charging stations for electric and hybrid vehicles;

5. Review and recommend appropriate classification for electric and hybrid vehicles and
the corresponding parameters for Motor Vehicle Inspection System (MVIS) approval;

6. 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;

7. Undertake Information and Education Campaign (IEC) on the economic, social and
environmental benefits on the use of electric and hybrid vehicles;

8. 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

9. 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 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.

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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 shall 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.

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.

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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 DTI 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 (DT!) 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 (DTI)
shall provide overall administrative support to the Task Force by appropriating the
corresponding budget needed for the effective implementation of its mandate.

SEC. 16. - Implementing Rules and Regulations. - The Department of Trade and
Industry (DTI) 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,

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