The Department of Trade and Industry (DTI) Secretary Ramon Lopez discussed possible e-vehicle industry opportunities in the Philippines in a high-level roundtable meeting with South Korean business executives recently.
The meeting was attended by over 30 South Korean business executives from construction and infrastructure, tool and die, as well as energy industries.
According to a recent report, the Secretary cited tariff modification of EV products under the ASEAN Free Trade Agreement as well as the consideration of a target date full EV utilisation/registration in the country as benefits.
Suggested incentives for the potential e-vehicle industry in the Philippines
Companies in South Korea’s e-vehicle industry are encouraging the Philippines to provide additional support to attract more investors in the e-vehicle and parts industry, aside from the usual fiscal incentives.
Since tax incentives are not enough in developing an industry of the future, the provision of tax holidays and monetary support per unit produced were suggested.
Additionally, there should also be government cost sharing in charging/battery replacement stations.
All of these are now being provided by the governments in South Korea and other ASEAN Member States.
Moreover, these countries have local programs to strengthen the industry to encourage the shift to e-vehicle, such as free registration and free parking for e-vehicles.
The Secretary together with Department Undersecretary Ceferino Rodolfo addressed the issues and clarified the concerns raised by existing locators on the Tax Reform for Attracting Better and Higher Quality Opportunities (TRABAHO) Bill, which rationalises tax incentives to investments.
According to the USec, The TRABAHO Bill will offer modern and more relevant incentives.
The Trade Chief assured investors that there will be a good transition period of the new tax system and there is no reason for them to delay their expansion projects in the Philippines.
Benefits of investing in the Philippines
He also emphasised the opportunities South Korean companies, particularly in the manufacturing industry, may explore when locating and expanding their operations in the country.
The Philippines is an ideal geographic base for South Korean manufacturing companies, specifically those focusing on automotive and auto parts, electronics and semiconductors, food processing, agribusiness, and other labour-intensive industries.
South Korea is a manufacturing powerhouse and expanding its business operations in the Philippines would be a win-win situation.
Businesses will have a greater market access for their products and be the government’s partner in providing jobs and opportunities to Filipinos.
Inclusive, Innovation-led, Industrial strategy
During the meeting, Department Undersecretary Rafaelita Aldaba also presented the Philippine government’s inclusive, innovation-led, industrial strategy (i3s).
The i3s complements the government’s thrust to promote an innovation ecosystem in the country, with different sectors partnering to generate more jobs and improved business opportunities.
This removes obstacles to growth, attracts investments, and creates jobs.
It also sets up the environment to strengthen MSMEs and the domestic supply chains.
This will encourage their participation in global and regional value chains, and link manufacturing with agriculture and services.