Philippines' P60 billion EV plan: what it actually buys (and doesn't)

The Philippine government isn’t handing out free electric cars to motorists. That’s the first thing to know about the ₱60 billion Electric Vehicle Incentive Strategy (EVIS), formalized under Executive Order 121.

What the program actually does is cap the total fiscal support – in the form of non-transferable Tax Payment Certificates – that eligible companies can claim when they manufacture electric vehicles and components inside the country. Those certificates can be used against certain national taxes and import duties. But the dollars-and-cents impact on showroom prices will depend entirely on how much manufacturers decide to pass on.

How the numbers add up

The ₱60 billion ceiling applies across all participating companies. Each firm can register up to two models, and no single model can receive more than ₱15 billion in tax credits. To qualify, an applicant must commit at least ₱5 billion in new investment and introduce a “locally manufactured” electric vehicle within three years of approval.

The phrase “locally manufactured” is deliberately broad. It can mean anything from final assembly of largely imported parts to a deeper supply chain that includes local sourcing and engineering. The fine print of EVIS is expected to differentiate between these levels, but the law itself leaves room for interpretation.

A critical test case: Mitsubishi’s hybrid plan

Mitsubishi Motors Philippines is one of the first companies to signal interest. Subject to application approval, it plans to produce a new hybrid model at its Santa Rosa plant around mid-2028. Reports indicate an initial investment of at least ₱7 billion, starting with battery pack assembly before moving to full vehicle production.

Here’s the nuance: assembling battery packs – combining cells with casing, cooling systems, and electronics – is not the same as manufacturing battery cells. The latter requires entirely different fabrication lines and chemistry expertise. The same distinction existed in the solar industry: when I worked at SunPower, we imported silicon ingots and sliced them into wafers, then processed them into cells before assembling panels. We didn’t just glue finished cells together.

The incentive structure should reward companies that bring more of the value chain to the Philippines, not just final assembly. Whether Mitsubishi’s plan qualifies for the higher tier of support will be a test of the government’s intent.

Tariff relief and local competition

Separately, the government has extended zero-tariff treatment on imported battery electric and hybrid vehicles until 2028. That policy gives Filipino buyers more choices from overseas factories, but it also puts local assembly plants at a cost disadvantage against large-scale foreign plants. EVIS is meant to bridge that gap – but only temporarily.

The program’s stated goal is to help factories reach sufficient scale to compete without incentives. If the tax certificates are used wisely, by the time the last peso is claimed, Philippine plants should be doing more than just final assembly and should be able to operate profitably on their own.

Lessons from the CARS program

The Comprehensive Automotive Resurgence Strategy (CARS) offered a similar tax certificate mechanism for the Toyota Vios and Mitsubishi Mirage. Those certificates were issued after targets were met, but when the 2026 budget left out funding for arrears, the government had to publicly assure manufacturers that valid claims would be honored.

EVIS should avoid that uncertainty. Certificates should be issued only after production milestones are met, and the government must ensure timely funding. Companies committing billions of pesos will hesitate if the support they’ve already earned can be delayed – which would defeat the purpose of encouraging local production.

What the ₱60 billion won’t buy

Car buyers will not receive these tax certificates. They may benefit indirectly if higher production volumes reduce factory costs, but manufacturers decide whether those savings reach the retail price. Motorists should not view the ₱60 billion as a discount fund. It’s a subsidy for manufacturing, not consumption.

Industry watchers: more clarity needed

As of April 2025, the Department of Trade and Industry has yet to release detailed implementing guidelines for EVIS, though consultations are ongoing. Some industry analysts note that the ₱60 billion figure is relatively modest compared to regional peers – Thailand’s EV incentives, for example, total several billion dollars – but the Philippines’ strategy of using tax certificates rather than direct cash grants may appeal to a fiscally constrained government.

The key question is how the government defines “local content.” If it requires a minimum percentage of locally sourced parts or cell-level manufacturing, the program could attract serious investment. If it accepts assembly-only, the long-term structural benefit may be limited.

What ₱60 billion ought to buy

The ideal outcome: factories that are not just assembling imported knocked-down kits, but that have developed local supply chains, trained workers, and built enough volume to stand on their own. If EVIS achieves that, the ₱60 billion will have been money well spent. If it ends up covering mostly assembly operations that can’t survive without continued support, the program will have missed the point.

That’s what ₱60 billion ought to buy – and what Filipino motorists and taxpayers should keep watching.