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

First Regular Session

House BillNo. 2316

Introduced by Honorable Mar-Len Abigail S. Binay

EXPLANATORY NOTE

Section 16, Article Il of the Philippine Constitution declares that it is the right of the
people to have a balanced and healthful ecology in accord with the rhythm and harmony of
nature, In line with this policy, this bill seeks to take an active step towards the use of modem
technology to reduce our consumption of fossil fuels that contribute to the phenomenon of global
warming by promoting the use of hybrid cars in the Philippines through the grant of favorable
tax measures and giving priority in franchise applications. By affording these incentives to
hybrid car manufacturers, importers, spare parts dealers, the costs of importing, manufacturing,
and/or owning hybrid cars is reduced thereby allowing a greater number of Filipinos to
own/utilize vehicles that use alternative and environmental friendly sources of energy.

In view of the foregoing, the approval of this bill is earnestly sought.

ante ABIGAIL S. BINAY


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

Sixteenth Congress
First Regular Session

House Bill No. 2316

Introduced by: Reps. Mar-Len Abigail S. Binay

AN ACT
PROVIDING INCENTIVES FOR THE MANUFACTURE, ASSEMBLY, CONVERSION
AND IMPORTATION OF ELECTRIC, HYBRID AND OTHER ALTERNATIVE FUEL
VEHICLES 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, 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 source 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 reducing the impact of greenhouse gas effect emitted from man-made sources
such as vehicle 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, encourage private

enterprise and provides incentives to needed investments. To accelerate economic


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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 (CBU’s) 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 valued-added tax (VAT) for nine (9) years from the
effectivity of this Act.

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

from the effectivity of this Act.


SEC. 6. INCENTIVE TO IMPORTERS. ~ The provision of any special or general law
to the contrary notwithstanding, the importation of CBU’s of 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.

SEC. 7. EXEMPTION FROM THE PAYMENT OF MOTOR VEHICLE USER'S
CHARGE (MVUO). - Electric, hybrid and other alternative fuel vehicles shall be exempt from.
the payment of the MVUC imposed by the Land Transportation Office (LTO) under Republic
‘Act No, 8794, otherwise known as “Motor Vehicle User’s Charge (MVUC) Act”.

SEC. 8 NON-FISCAL INCENTIVES - PRIORITY IN FRANCHISE
APPLICATION. ~ Public Utility Vehicle (PUV) operators exclusively utilizing electric, hybrid
and other alternative fuel 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.

SEC. 9. 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, converter 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. 10. 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. 11. 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. 12. REPEALING CLAUSE. ~ All laws, acts, presidential decrees, executive
orders, issuances, presidential proclamation, 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. 13. EFFECTIVITY CLAUSE, ~ This Act shall take effect fifteen (15) days after
its publication either in the Official Gazette or at least two (2) newspapers of general circulation.

Approved,