~rl(~ntr 
FIFTEENTH CONGRESS OF THE REPUBLIC 
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;~lhrf \!f I~" i'::n "br l1 
OF THE PHILIPPINES 
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First Regular Session 
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'11 
MAY 19 P 2 :45 
SENATE 
S. No. 2834 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
The Constitution, Article II, Section 16 provides: 
Section 16. 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. 
High fuel consumption automobiles take a considerable toll on the country's fuel supply, 
ffi1d cause damage to the environment through greenhouse gas and other noxious gas emissions 
which are higher than green, fuel-efficient automobiles. 
This Act establishes a five-year national voucher program to encourage owners to trade 
in older, less fuel efficient cars, trucks or sports utility vehicles for more fuel-efficient vehicles 
or to use mass transit. Based on an estimated 500,000 to 1,000,000 vouchers issued per year, it 
is estimated that the country can save between 40,000 to 80,000 barrels per day of motor fuel; 
reduce greenhouse gas emissions between 6.6 million metric tons to 7.6 million metric tons, or 
the equivalent of removing 1.1 million to 2.2 million vehicles from the road in one year; ffi1d 
reduce noxious gas emissions by 3,043 short tons in five years. 
L.V'.. 41±·~~ . ~y;tq:r ~l 
MIRIAM DEFEj~SOR SAN'¥lA~ f"v 


FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE Pl-IILIPPINES 
) 
First Regular Session 
) 
'11 
MAY 19 P2 :45 
SENATE 
S. No. 2834 
Introduced by Senator Miriam Defensor Santiago 
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AN ACT 
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TO ACCELERATE MOTOR FUEL SAVINGS NATIONWIDE AND PROVIDE 
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INCENTIVES TO REGISTERED OWNERS OF l-IIGH FUEL CONSUMPTION 
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AUTOMOBILES TO REPLACE SUCH AUTOMOBILES WITH FUEL EFFICIENT 
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AUTOMOBILES OR PUBLIC TRANSPORTATION 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Short Title. - This Act shall be known as the "Accelerated Retirement of 
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Inefficient Vehicles Act." 
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SECTION 2. Declaration of Policy. - It is hereby declared the policy of the State 
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(a) 
To protect and advance the right of the people to a balanced and healthful ecology 
lOin accord with the rhythm and harmony of nature; 
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(b) 
To conserve fuel and minimize the country's dependence on foreign oil; and 
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(c) 
To reduce greenhouse and other noxious gases in the atmosphere. 
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SECTION 3. Definitions. - In this Act, the term-
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(a) 
"Automobile" means a four-wheeled vehicle that is propelled by fuel, or by 
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alternative fuel, manufactured primarily for use on public streets, roads, and highways and rated 
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at less than 10,000 pounds gross vehicle weight, except-
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(1) 
(2) 
a vehicle operated only on a rail line; 
a vehicle manufactured in different stages by two (2) or more 
manufacturers, if no intermediate or final-stage manufacturer of that 
vehicle manufactures more than 10,000 multi-stage vehicles per year; or 
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(b) 
(3) 
a work truck. 
"Certificate of registration" means a government-issued document showing 
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ownership of an automobile. 
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(c) 
"Dealer" means a person engaging in the sale, lease, or distribution of new 
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automobiles to the first person (except a dealer buying as a dealer) that is an ultimate purchaser. 
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(d) 
(e) 
"Department" means the Department of Energy. 
"Dismantler" means a person who is licensed to operate a business employing 
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three (3) or more persons to take automobiles apart for the purpose of reclaiming usable parts 
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and recyclable materials. 
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(f) 
(g) 
"Eligible fleet operator" means-
(1) 
(2) 
the operator of a fleet of automobiles that is owned by the national or local 
government; or 
the owner of two (2) or more automobiles authorized to carry passengers 
for hire under existing laws, rules, and regulations governing the operation 
oftaxi cabs. 
"Eligible high fuel consumption automobile" means a high fuel consumption 
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automobile that, at the time it is presented for participation in the program established in this 
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Act-
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(h) 
(1) 
(2) 
is in drivable condition; and 
has been continuously registered and licensed to operate for a period of 
not fewer than one hundred twenty (120) consecutive days for operation 
on public roads. 
"Fuel efficient automobile" means an automobile manufactured for any model 
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year after 2003 that qualifies as fuel efficient in accordance with rules and regulations 
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promulgated by the Secretary of Energy. 
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(i) 
"High fuel consumption automobile" means an automobile manufactured for any 
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model year before 2008 for which the originally certified measured fuel economy level is less 
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than eighteen (18) miles per gallon. 
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"Measured fuel economy level" means the fuel economy level of a new 
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automobile model measured in accordance with rules and regulations promulgated by the 
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Secretary of Energy. 
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(k) 
"New automobile" means an automobile for which a manufacturer, distributor, or 
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dealer has never transferred the equitable or legal title to such automobile to an ultimate 
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purchaser. 
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(I) 
"Program" means the Accelerated Retirement of Inefficient Vehicles Program 
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established under this Act. 
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(m) 
"Registered owner" means, with respect to an automobile, the person whose name 
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appears on the current Certificate of Registration for such automobile. 
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(n) 
(0) 
(p) 
"Scrap recycling facility" means a business-
(1) 
(2) 
employing three (3) or more individuals at a fixed location, where 
machinery and equipment are utilized for processing and manufacturing 
scrap metal into prepared grades; and 
whose principal product is scrap iron, scrap steel, or nonferrous metallic 
scrap for sale for remelting purposes. 
"Secretary" means the Secretary of Energy. 
"Ultimate purchaser" means, with respect to any new automobile, the first person 
who in good faith purchases such automobile for purposes other than resale. 
(q) 
"Voucher" means a voucher issued to the registered owner of an eligible high fuel 
consumption automobile wlder this Act. 
SECTION 4. Accelerated Retirement of Inefficient Vehicles Program. - (a) There is 
established in the Depmiment of Energy a program to be known as the "Accelerated Retirement 
ofInefficient Vehicles Program," through which the Secretary shall-
(1) 
authorize the issuance a voucher, subject to the limitations described in 
subsection (e)(I), to any person or eligible fleet operator who is a 
registered owner of an eligible high fuel consumption automobile, which 
voucher may be used solely by such person or eligible fleet operator for 
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(2) 
(3) 
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the purchase of a new or used fuel efficient automobile upon the transfer 
of the Certificate of Registration to such high fuel consumption 
automobile to a dealer, dismantler, or scrap recycling facility participating 
in the Program; 
allow any dealer, dismantler, or scrap recycling facility to participate in 
the Program if the dealer, dismantler, or scrap recycling facility agrees 
to-
(A) 
(B) 
(C) 
(D) 
scrap any eligible high fuel consumption automobile upon 
receiving the 
Certificate of Registration to such automobile 
pursuant to the Program; 
issue a voucher to the registered owner of such automobile; 
certify to the Secretary that such automobile has been crushed or 
shredded in accordance with subsection (e)(4); and 
comply with all applicable requirements under this Act and any 
rules and regulations promulgated by the Secretary to carry out this 
Act; 
require that all dealers accept vouchers presented by a person or eligible 
fleet operator described in paragraph (I) as partial payment for the 
purchase of a new or used fuel efficient automobile; and 
make payments to dealers for vouchers accepted by such dealers under 
paragraph (3) between January 1, 2010, and December 31, 2014, in 
accordance with the provisions of this section. 
(b) 
Amount of voucher- (I) A voucher issued under the Program may be applied to 
offset the purchase price of new fuel efficient automobile, a used fuel efficient automobile, or a 
highly fuel efficient automobile. The value of the vouchers shall be determined in accordance 
with rules and regulations prescribed by the Secretary of Energy. 
(2) 
A voucher issued under the Program may be applied to acquire single-
passenger transit fare credits from participating transit operators in an 
amount equal to the amounts provided under the previous paragraph. 
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(c) 
Administrative payments to participating dealers, dismantlers, and scrap recycling 
facilities - The Secretary shall provide for a payment of a reasonable amount to participating 
dealers, dismantlers, and scrap recycling facilities for each voucher issued under the Program in 
consideration of the administrative costs related to such issuance. 
(d) 
Lists of eligible automobiles to be maintained - The Secretary, in cooperation 
with the Secretary of Transpottation and Communications, shall prepare, maintain, publicize, 
and make available through the Internet, lists of automobiles, classified by make and model, 
which are classified under this section as~ 
(e) 
(1) 
eligible high fuel consumption automobiles; 
(2) 
(3) 
new fuel efficient automobiles; or 
used fuel efficient automobiles. 
Program specifications~ (1) Limitations~ 
(A) 
Vouchers per person~ Not more than one (1) voucher may be 
issued to a person. A person may be issued a voucher if the person 
demonstrates, in a manner prescribed by rules and regulations by 
the Secretary, that such person~ (i) is the registered owner of an 
eligible high fuel consumption automobile; and (ii) attests that 
such high fuel consumption automobile has not been imported into 
the Philippines during the previous four-month period. 
(8) 
(C) 
Vouchers for eligible fleets- A voucher for the purchase of a new 
or used fuel efficient automobile from a dealer may be issued to an 
eligible fleet operator for each eligible high fuel consumption 
automobile for which such eligible fleet operator is the registered 
owner, as demonstrated in a manner prescribed by rule by the 
Secretary. 
Offset~ A dealer (i) shall credit the amount of the voucher being 
applied toward the purchase of a fuel efficient automobile; and (ii) 
may not offset the amount of the voucher against any other rebate 
or discount otherwise being offered by the dealer or manufacturer. 
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(2) 
(3) 
(D) 
(E) 
(F) 
(G) 
(H) 
(I) 
Joint ownership-- Not more than one (1) voucher may be issued 
to the joint owners of an eligible high fuel consumption 
automobile, unless such automobile is operated by an eligible fleet 
operator. 
No combination of vouchers- A person may not apply two (2) or 
more vouchers issued under the Program toward the purchase of a 
single fuel efficient automobile. 
Combination with other incentives permitted-Notwithstanding 
any other provision of law, the availability or use of a government 
tax incentive for the purchase of a fuel efficient automobile shall 
not limit the value or issuance of a voucher under the Program to 
any person or eligible fleet operator otherwise eligible to receive 
such a voucher. 
Duration-Each voucher shall expire two (2) years after the date 
on which the voucher is issued and may not be renewed. 
Prompt 
fulfillment 
of redemption 
requests 
required-The 
Secretary shall provide for the payment of all vouchers submitted 
to the Secretary for redemption in accordance with the provisions 
of this Act not later than sixty (60) days after such submission, or 
within such lesser period as the Secretary determines to be 
practicable. 
Number and amount-The total number and value of vouchers 
issued under the Program may not exceed the amounts 
appropriated for such purpose. 
Consumer Education Program-The Secretary shall calTY out a consumer 
education program aimed at informing persons about the Program, its fuel 
economy purposes, and the availability of vouchers under the Program. 
Transit fare credits-The Secretary shall promulgate rules and regulations 
that allow operators of bns and rail public transit systems to redeem 
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(4) 
vouchers properly issued to any person under this Act to offset the 
purchase price of annual transit passes or any other form of individual 
transit fare credit designated by the transit system operator. Participating 
transit system operators shall establish the terms and conditions for the 
ownership, use, and expiration of any transit fare credits acquired through 
the use of a voucher issued under this Act. 
Disposition of eligible high fuel consumption automobiles-(A) In 
general-Any automobile dealer, dismantler, or scrap recycling facility 
who receives a Certificate of Registration to any eligible high fuel 
consumption automobile in exchange for a voucher under the Program 
shall certify to the Secretary, in such manner as the Secretary shall 
prescribe by rule, that such automobile and engine: (i) have been crushed 
or shredded within such period as the Secretary prescribes; (ii) have been 
processed prior to crushing or shredding to ensure the removal and 
appropriate disposition of refrigerants, antifreeze, lead products, mercury 
switches, and such other toxic or hazardous vehicle components as the 
Secretary may specify by rule and regulation; and (iii) have not been, and 
will not be, sold, leased, exchanged, or otherwise disposed of for use as an 
automobile in the Philippines or in any other country. 
(B) 
Savings Provision-Nothing in subparagraph (A) may be 
construed to preclude a dismantler from: (i) selling any parts of 
such scrapped automobile other than the engine block and drive 
train for use as replacement parts; or (ii) retaining the proceeds 
from such sale. 
(C) 
Coordination-The Secretary shall coordinate with the Land 
Transportation Office (LTO) and other appropriate government 
agencies to ensure that the national motor vehicle title information 
system is appropriately updated to reflect the crushing or shredding 
of high fuel consumption automobiles under this section. 
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(f) 
Rulemaking-Not later than one hundred twenty (120) days after the date of the 
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enactment of this Act, the Secretary shall promulgate rules and regulations to implement the 
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Program, including-
(I) 
(2) 
the removal and disposition of toxic or hazardous materials from eligible 
high fuel consumption vehicles presented for participation in the program; 
and 
the enforcement of the penalties prescribed in section 5. 
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(g) 
Nothing in this Act or any other provision oflaw limits the authority of Congress 
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or the Secretary to terminate or limit the Program or the issuance of vouchers under the Program. 
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SECTION 5. Penalties. - Any person who violates any provision under this Act or any 
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rules and regulations pursuant thereto shall be liable to the Philippine Government for a civil 
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penalty of not more than fifty thousand pesos (P50,000) for each violation. A separate violation 
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shall be deemed to have occurred for each day the person continues to be in violation of any 
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provision under this Act. 
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SECTION 6. Report. - The Secretary shall submit a report to the respective Committee 
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on Energy of the Senate and of the House of Representatives every six (6) months that specifies, 
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for the most recent six-month period the following: (a) the number of vouchers which have been 
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used under the Program; and (b) the make, model, model year, and location of sale of each 
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vehicle traded in or purchased under the Program. 
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SECTION 7. Authorization of Appropriations. - There are authorized to be appropriated, 
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for each of the fiscal years 2010 through 2015, such sums as may be necessary to carry out this 
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Act, which sums shall remain available until expended. 
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SECTION 8. Separability Clause. - If any provision, or part hereof is held invalid or 
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unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
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valid and subsisting. 
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SECTION 9. Repealing Clause. - Any law, presidential decree or issuance, executive 
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order, letter of instruction, administrative order, rule or regulation contrary to or inconsistent 
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with, the provisions of this Act is hereby repealed, modified, or amended accordingly. 
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SECTION 10. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
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publication in at least two (2) newspapers of general circulation. 
Approved, 
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