KEYNOTE MESSAGE OF SECRETARY RAMON M. LOPEZ
7TH PHILIPPINE ELECTRIC VEHICLE SUMMIT
17 July 2019, SMX Convention Center, Mall of Asia, Pasay City
Ladies and gentlemen, good morning!
First, let me congratulate the EVAP for continuing to hold this summit, which serves as an important platform for stakeholders to discuss relevant topics and concerns of the EV industry.
EVAP has been a steadfast partner of the Department of Trade and Industry (DTI) and the Board of Investments (BOI) in the past few years. They’ve been working with us to push the development of the local EV industry, from establishing an industry roadmap to partnering with us in lobbying for the various policies and programs for electric vehicle industry.
It is this strong public and private sector collaboration that will help us to realize the EV industry’s potential. This, in turn, will contribute to our goal of climate resilience, energy security, and sustainable growth. Our goal is that by the year 2022, we envision a clean, green, and sustainable Philippines with a robust EV industry.
Future of EV Industry
Speaking of goals, at a meeting with South Korean companies last month, we raised the idea of the Philippines being the regional production hub for e-vehicles in the future. And I must say that Usec. Mark already mentioned that if there is a percentage or a quota where e-vehicles should be part of government procurement, hopefully, there should also be a percentage that is locally-sourced for the manufacturing of e-vehicles.
If we are to achieve this goal, we must have a special program like what we have now, the Comprehensive Automotive Resurgence Strategy (CARS) Program, that will give specific support to the industry and the entire value chain. From parts to assembly, to the market, the entire ecosystem that can induce even the demand.
The Philippines being a regional production hub is not an impossible goal to achieve as our EV industry holds great promise in a booming e-vehicle global market. The sale of e-vehicle units is increasing globally with 2.1M sold worldwide in 2018.
In the Philippines, there are presently over 4,300 registered e-vehicles, a definite increase from 2016 when there was just more than a thousand. There are also now around 19 charging stations concentrated in Metro Manila. So obviously, that number will have to grow. This is, I guess everyone will agree, an industry where there is nowhere to go but up.
The industry itself has around 46 players. These are composed of: 20 local manufacturers and 8 foreign ones; 11 parts and components manufacturers; and 7 importers, dealers and traders, as well as service providers.
Capable of producing a wide range of e-vehicle products, the industry has a production capacity of over 100,000 units a year. What’s more, they employ around 15,000 people from the auto-supporting industries.
The Compound Annual Growth Rate (CAGR) of this industry is 61% and they have a project cost amounting to over Php750M. While we already have major players in the industry like Bemac, Tojo Motors, PHUV, and Star8, new ones are entering the market to add new capabilities to the industry. We now have QEV Philippines setting up fast-charging stations for EVs, as well as Le Guider International manufacturing e-cars, e-jeepneys, and e-trikes locally.
Gov’t commitment
Given the growth of this industry, the government is committed to support the development of the EV industry. Our efforts range from fiscal to non-fiscal incentives, as well programs and policies.
Under the Omnibus Investments Code of the Board of Investments, this is part of the 2017 Investment Priorities Plan (IPP), qualified manufacturing activities—including the manufacture of EVs and their parts—are one of the priority sectors that may be given incentives. Also included are the establishment of charging/refueling/swapping stations for alternative fuel vehicles.
Under our Motor Vehicle Development Program (MVDP), there is a reduction of duty rates of 0% for imported parts and components for the assembly of alternative fuel vehicles. We’ve also included EVs in the proposed MVDP 2.0 framework, and preferential and differential treatment in terms of incentives may be given to EVs and their development.
Lastly, Executive Order (EO) 488 series 2006 provides zero tariffs for e-vehicle components, parts, and accessories for the assembly of hybrid, electric, flexible fuel, and CNG motor vehicles through the MVDP.
For programs and policies that are open to the EV industry, there is the PUV Modernization Program, which takes into consideration the inclusion and participation of qualified EV eco-PUV units.
However, we should ensure the safety and reliability of these EV eco-PUV units. As such, we are proposing that EV companies that don’t have OEM global sales track record require a certification from the Department of Science and Technology (DOST) on product safety and reliability.
The automotive industry—which includes e-vehicles—is one of the 12 priority sectors considered under our Inclusive Innovation Industrial Strategy (i³S). This strategy aims at growing innovative and globally competitive manufacturing, agriculture, and services while strengthening their linkages into domestic and global value chains.
Evidently, if you are part of this priority industries identified in the i³S, these will be given support. Through the EV Industry Roadmap prepared by EVAP, BOI has been working with stakeholders and other government agencies to come up with strategies to further develop the industry.
These include improving the business environment in the Philippines for this industry, including the development of standards for EVs. The latter is currently an ongoing initiative under the guidance of the Bureau of Philippine Standards (BPS). We are also crafting registration procedures for EVs with the Land Transportation Office (LTO) and pushing a draft of the aforementioned Alternative Fuel Vehicles bill.
However, DTI is establishing its own Philippine EV and Other Next Generation Vehicles (xEV) Roadmap as well. Through a whole-of-government approach, this roadmap aims to build our EV ecosystem and encourage EV adoption in order to address severe air pollution and its threats to public health. At the same time, it will promote EV and xEV manufacturing, as well as the building of charging infrastructure.
To establish this xEV ecosystem, there are 5 key elements: Regulatory Framework; Incentives and Industry Development; Innovation and R&D; HRD and Training; and Information, Education, and Communication.
Industry Partnerships
Partnerships and collaborations with government agencies and stakeholders both here and abroad will help us sustain our efforts to develop the EV industry.
For example, DTI-BOI had partnered with Japan’s New Energy and Industrial Technology Development Organization (NEDO) for the Mobility as a System (MAAS) Project. This project, which was concluded in the third quarter of last year, involved the introduction of EVs and the necessary technologies for EV utilization through a demonstration. In this case, 50 units of BEMAC’s e-trike were deployed in Intramuros, Manila to provide public transport services at an affordable price.
Speaking of MOUs, DTI signed one with South Korea’s Ministry of Trade, Industry and Energy (MTIE) for bilateral cooperation in the EV industry. EVAP signed one as well with the Power Battery Applications Branch of the China Industrial Association of Power Sources (CIAP-PBA) to explore battery production in the Philippines.
Furthermore, BOI is implementing capacity building programs for our motor vehicle industry with the Japan International Cooperation Agency (JICA) and the World Bank-International Finance Corp. (WB-IFC).
On a last note, ongoing negotiations between the Philippines and South Korea for a Free Trade Agreement (FTA) may help the EV industry by supporting potential investment in a local battery industry, thanks to our nickel and copper resources. We’re hoping that this FTA will be concluded by November of this year during the ASEAN-Republic of Korea Summit, where we hope to see President Duterte in Korea to visit President Moon.
Conclusion
To conclude, I am hopeful for the Philippine EV industry, thanks to the strong public-private sector collaboration and the whole-of-government approach being applied to support it.
This is the realization of the promise of Tapang at Malasakit given by President Rodrigo Duterte: that by empowering our people, they can create a better life—and future—for themselves.
Thank you and mabuhay tayong lahat.