Foreign chambers want zero tariff on hybrid vehicles

MANILA, Philippines — Several foreign chambers have expressed support for calls for the government to include hybrid vehicles in the proposed executive order granting zero tariffs on the importation of electric vehicles (EVs).

In a recent press conference for the Arangkada Philippines forum, Korean Chamber of Commerce of the Philippines president Hyunchong Um expressed support for the imposition of zero tariffs on EV imports.

He pointed out that in some countries, governments offer subsidies to lower the price of EVs to facilitate the shift to such vehicles.

“But I think for the Philippines, just even removing the tariffs, that would be a great benefit not only to the environment, but for preparing for the next stage of the automotive industry,” Um said.

He also supports calls of including hybrid vehicles under the planned zero tariffs.

“I think hybrid or a combination will be a good start, with changing the combustion engine to electric cars,” he said as he emphasized the need for setting up the EV infrastructure, particularly charging stations.

In late November, the National Economic and Development Authority (NEDA) Board endorsed an executive order that will temporarily reduce the tariff rates on certain EVs to zero percent to help develop the industry and address the impact of climate change.

“We want to encourage the adoption, the use of e-vehicles because that will address pollution issues and, of course, adaptations to climate change; and we believe that’s the future,” Socioeconomic Planning Secretary Arsenio Balisacan said in an earlier press briefing in Malacañang.

“But more importantly, we want to be part of the value chain globally in this drive to get to these new industries, new growth drivers. And hopefully, we can develop our own industries, and this reduction in tariff is part of that building up of ecosystem,” he said.

The EO also aims to expand market sources and encourage consumers to consider acquiring e-vehicles, improve energy security by reducing dependence on imported fuel, the NEDA said in a statement.

The order will modify tariff rates on certain e-vehicles like passenger cars, buses, mini-buses, vans, trucks, motorcycles, tricycles, scooters and bicycles, including their parts and components. It will reduce the most favored nation tariff rates to zero percent for five years on completely built up units of certain e-vehicles, except for hybrid-type vehicles.

It will also modify tariff on certain parts and components of e-vehicles from five percent to one percent for five years.

“As of now, the hybrid will not be affected by this change in the tariff rates. But as we said, we will review the performance of this reform after one year to see if there is a need to also include  hybrid,” Balisacan said.

According to earlier news reports, the European Chamber of Commerce of the Philippines (ECCP) submitted a position paper to the Department of Energy (DOE) arguing that the planned zero tariffs on EVs should also cover hybrids.

Australian-New Zealand Chamber of Commerce of the Philippines vice president Bradley Norman highlighted the environmental element of the planned zero tariff on EVs, as it works to bring in EVs into the Philippines as cheaply as possible, in line with efforts to replace fossil-fueled vehicles.

“It will certainly be great if it can be applied to the hybrids as well because there seems to be the bridge between the fossil-fueled motor vehicles to electric vehicle,” Norman said.

Meanwhile, Japanese Chamber of Commerce and Industry of the Philippines Inc. vice president Nubuo Fujii and American Chamber of Commerce of the Philippines executive director Ebb Hinchcliffe also expressed support for the planned zero tariffs on EVs.