MANILA -- President Ferdinand R. Marcos Jr. has approved the temporary modification of import duty rates on electronic vehicles, parts and components under Republic Act (RA) No. 10863 or the Customs Modernization Act.

Under Executive Order (EO) No.12, signed on January 13, Malacañang said the move will help boost the electronic vehicle market in the country, support the transition to emerging technologies and encourage consumers to consider electric vehicles as a cleaner and greener transportation option.

The EO states that under RA No. 11697 or the “Electric Vehicle Industry Development Act,” the state shall “ensure the country’s energy security and independence by reducing reliance on imported fuel for the transportation sector.”

“The state has the paramount obligation to protect the health and well-being of the people from hazards of pollution and greenhouse gases,” the EO reads.

The transportation sector is one of the largest sources of air pollution and energy-related greenhouse gas emissions in the country at 34 percent, the EO noted, with road transportation accounting for 80 percent of those emissions.

Section 1618 of RA No. 10863 empowers the President, in the interest of general welfare and national security and upon recommendation of the National Economic and Development Authority (NEDA), to increase, reduce, or remove existing rates of import duty.

On Nov. 24, 2022, the NEDA Board endorsed the temporary reduction of the Most-Favored Nation (MFN) tariff rates on certain e-vehicles and their parts and components for a period of five years.

In a media release, the NEDA said the EO will temporarily reduce the MFN tariff rates to zero percent for five years on Completely Built Up (CBU) units of certain electric vehicles, except for hybrid-type EVs.

“It will also implement tariff modification on certain parts and components of EVs from five percent to one percent for five years… The EO aims to expand market sources and encourage consumers to consider acquiring EVs, improve energy security by reducing dependence on imported fuel, and promote the growth of the domestic EV industry ecosystem,” NEDA stated in its release, dated Nov. 24, 2022.

According to EO No. 12, the MFN tariff rates shall be subject to review after one year from the implementation of the order.

The NEDA is directed to submit to the President, through the Office of the Executive Secretary, its findings and recommendations on the matter. (PCO)