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SIXTEENTH CONGRESS ¥ iS 01
REPUBLIC OF THE PHILIPPINES _) Led
FIRST REGULAR SESSION ) a

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Roc
Representative Maximo B. Rodriguez, Jr.

387

EXPLANATORY NOTE

House Bill No.

This bill was originally introduced as House Bill No. 5161 by the undersigned
Rufus B. Rodriguez during the Fifteenth Congress. It was approved by the Committee
on Ways and Means as consolidated House Bill No. 5460. 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.

For the first half of 2013, oil companies in the Philippines have increased gas
prices to around P46.60 to P54.55 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 earnestly requested

RUFUS B. RODI EZ

MAXIMO’B. RODRIGUEZ, JR.


SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

387

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 of 2013”.

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, 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 internal 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.

(d) 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 (DTI) 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 DTI 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,