HOUSE OF REPRESENTATIVES

RECEIVED
9 JUL 2016
SEVENTEENTH CONGRESS > DATE:

REPUBLIC OF THE PHILIPPINES )

First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Maximo B. Rodrijuy

House Bill No, 1690
EXPLANATORY NOTE

This bill was originally introduced as House Bill No. 5161 during the Fifteenth
Congress. It was approved by the Committee on Ways and Means as consolidated House
Bill No. 6460. It was approved on 2 reading on March 6, 2013 and 3" reading on March 21,
2013. It was transmitted to the Senate on January 29, 2013 where it was also approved
However, lack of time prevented it from being subject to a Bicameral Conference Committee.
It was also re-filed during the 16" Congress.

For the first half of 2013, oil companies in the Philippines have increased gas prices
to around P46.60 to P54.56 per liter and the prices of diesel to around 38.10 to P41.45 per
liter. And while there is some relief in the immediate future because of the decrease of the
price oil in the world market, there is no guarantee that it will last.

‘As such, there is a need to look into and encourage alternative sources of energy
and other technology that would lessen our dependence on oil. And one of these
technologies available is the hybrid technology in motor vehicles. Test driving results show
that a full tank of unleaded gasoline costing P1,800 for hybrid vehicles would travel the same
distance as a full tank of diesel costing P3,000.

Currently, there are very few hybrid vehicles being sold in the country because of its
very high price tag which is caused by the very high excise and other taxes imposed by the
government. Figures from Toyota Motor Philippines, Inc., dealers of the Toyota Prius and the
Lexus Hybrid Vehicles show that only about 100 hybrid vehicles were sold by their company
since starting to offer said vehicles in the country. Hence there is a need to provide
incentives for the manufacture, assembly, and importation of electric, hybrid and other
alternative fuel vehicles.

Further, these hybrid vehicles would not only lessen our dependence on oil but also
help protect our environment because of the lower amounts of pollution that they emit,

In view of the foregoing, immediate passage of this bill is eamestly requested.

MAXIMO B, WO sx JR.


SEVENTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Maximo B. Rodriguez, Jr.

1690

House Bill No.

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

Be it enacted by the Senate and the 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”.

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 dectared:
(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, security and conservation, and to speed up
the deployment of cleaner technology; and
(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 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:

(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
intemal combustion engine (ICE) with a battery-powered electric motor to gain advantages
of both propulsion systems.

(c) 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.


(4) 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.

(e) Importer shall refer to any individual, partnership, corporation or other entity engaged in
the importation of completely built units (CBUs) of electric, hybrid and other alternative fuel
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. 5. 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 value-added tax (VAT) for nine (9) years
from the effectivity of this Act.

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

SEC. 6. Incentives to Importers. - The provision of any special or general law to the contrary
notwithstanding, the importation of CBUs of electric, hybrid and other alternative fuel
vehicles shall be exempt from the payment of excise taxes and duties for four (4) years from
the effectivity of this Act.

SEC. 7. Registration, Implementation and Monitoring. - The Department of Finance (DOF)
and the Department of Trade and Industry (DT!) shall be responsible for the administration
and implementation of the incentives granted under this Act.

Manufacturers, assemblers, converters 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 DT! shall meet regularly to monitor and review
the implementation of the incentives provided herein

SEC. 8. 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.

SEC. 9. 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. 10. Repealing Clause. - All laws, acts, presidential decrees, executive orders,
issuances, presidential proclamations, 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. 11. Effectivity Clause. — This Act shall take effect fifteen (15) days after its publication
either in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,