The Philippine government has launched a new incentive programme worth up to 60 billion pesos (approximately €852 million) to encourage domestic electric vehicle manufacturing and strengthen the country’s position in the regional automotive industry.
The Electric Vehicle Incentive Strategy (EVIS), established through an executive order signed by President Ferdinand Marcos Jr., provides investment and production incentives for manufacturers of electric vehicles and key components.
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Incentives for Local Manufacturing
The programme supports the production of battery-electric vehicles (BEVs), hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and fuel cell electric vehicles (FCEVs), covering both passenger and commercial vehicle segments as well as parts and components.
According to the government, the initiative is designed to expand domestic manufacturing, attract new investment, increase electric vehicle adoption and reduce the country’s reliance on fossil fuels while supporting greenhouse gas reduction targets.
Support for each manufacturer is capped at 15 billion pesos, with companies permitted to register up to two vehicle models under the programme.
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Investment and Production Requirements
Manufacturers seeking investment incentives must commit at least five billion pesos in new capital expenditure and begin production of the approved vehicle model within three years.
To qualify for production incentives, companies must manufacture complete vehicles in the Philippines, produce mandatory components locally and maintain a minimum production capacity of 10,000 vehicles.
If applications exceed the available funding, the government will select up to four manufacturers based on factors including investment commitments, production plans, job creation, economic impact and compliance with domestic and international vehicle standards.
Applicants must also submit long-term after-sales support plans covering battery recycling or disposal and spare parts availability for at least 10 years.
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Two Incentive Mechanisms
The EVIS programme includes two forms of fiscal support.
Under the Fixed Investment Support (FIS) scheme, manufacturers of battery-electric vehicles and components may receive reimbursements of up to 40% of eligible capital investment, while hybrid, plug-in hybrid and fuel cell vehicle projects qualify for up to 30%.
Eligible expenditure includes manufacturing equipment, tooling, research and development, engineering, production start-up costs and workforce training, although land acquisition is excluded.
Manufacturers may also qualify for a Production Volume Incentive (PVI) of up to 12% of a vehicle’s ex-factory price, capped at 200,000 pesos per vehicle.
Both incentive schemes are available for up to 10 years.
Tax-Based Support
Rather than providing direct cash grants, the Philippine government will issue non-transferable Tax Payment Certificates that can be used to offset income tax, excise tax, value-added tax and import duties.
The Board of Investments will oversee implementation of the programme through a newly established inter-agency committee responsible for assessing applications, monitoring compliance and administering incentives.
The government said the programme is intended to provide targeted, performance-based fiscal support to encourage long-term investment in the country’s electric vehicle manufacturing sector while positioning the Philippines as a regional production hub.
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