EV makers eye Philippines as Manila sets ₱60-billion incentives, ends ICE subsidy amid global oil shock

Manila: With the Philippine government discontinuing its multi-billion-peso support programme for internal combustion engine (ICE) vehicle manufacturing, electric vehicle (EV) makers are stepping up interest in the country’s new ₱60-billion ($1 billion) Electric Vehicle Incentive Strategy (EVIS).

The shift follows the formal end of the Comprehensive Automotive Resurgence Strategy (CARS) and RACE Programmes, which for more than a decade enjoyed up to ₱27 billion in government incentives, to create jobs while developing small passenger cars, like Toyota Vios and Mitsubishi Mirage.

Amid the global oil crunch, both CARS and RACE had been scrubbed recently. Now, officials said a number of interested investors have expressed their intent to apply under EVIS.

Policy pivot

A senior Philippine trade official said the policy pivot reflects global industry trends and the country’s intent to position itself within the fast-growing EV supply chain rather than continue backing conventional engine platforms.

Under EVIS, the government is crafting a package of fiscal and non-fiscal incentives aimed at attracting EV assemblers, battery manufacturers and parts suppliers.

The plan complements the Electric Vehicle Industry Development Act, which already grants tax breaks, import duty exemptions and priority registration for EVs.

FACT FILE:

• EVIS is expected to prioritise battery manufacturing, assembly, charging infrastructure and e-public transport.

• Industry groups say several Asian and European EV brands have initiated exploratory talks, seeing an opportunity as policy support shifts decisively toward electrified mobility

• EV sales in Southeast Asia grew by over 60% in 2025, led by Thailand, Indonesia and Vietnam.

• The CARS programme set a target of 200,000 units per participant over six years, with billions of pesos in incentives.

• Transport accounts for about 30% of the Philippines’ energy use, much of it oil-based.

• The Philippines imports nearly 100% of its fuel, making electrification attractive for energy security.

Too little too late?

Recently, the Japanese automaker announced plans to produce what could become the Philippines’ first locally-manufactured EV, amid the nearly 200% surge in local fuel prices, particularly diesel, driving overall inflation.

The plan involves producing a “new hybrid EV model” at the Mitsubishi Motors Philippines Corp. plant in Santa Rosa, Laguna by 2028.

Vietnam has already gone full blast with electrification of transport, and VinFast is now helping refleet Manila taxis.

Meanwhile, an official of local automaker Francisco Motors, which is producing e-jeepneys being exported to Africa, said they are getting sidelined.

While the list of state incentives under EVIS (including the number of slots, support package and production milestones) to be given to EV makers is yet to be published, the pivot is a signal the Asian nation it now fully open for EV business.

"There have been consultations, including on the package support, to guage what level would really by needed by investors," Trade Undersecretary and Board of Investments (BOI) Managing Head Ceferino Rodolfo told local media.