NEDA to conduct review of tariff structure

Louella Desiderio - The Philippine Star
NEDA to conduct review of tariff structure
NEDA Secretary Arsenio Balisacan
STAR / File

MANILA, Philippines — The government is set to present a new tariff structure for agricultural products and electric vehicles (EVs) to the National Economic and Development Authority  (NEDA) Board chaired by President Marcos next month.

“We are doing a comprehensive review of the entire tariff structure,” NEDA Secretary Arsenio Balisacan said.

Balisacan said the review covers all products including tariffs on agricultural commodities and EVs, for a new tariff structure for 2025 to 2028.

Following the review at the technical level and the committee level, he said the results would be elevated to the NEDA Board, which will be meeting next month.

“The overall intention of that review is to further structure the tariff regime so that we can have a more efficient competitive economy so that we don’t have cases where some industries have low tariffs for their outputs, for the outputs that they produce, but they face high tariffs for the inputs that they use for their production, effectively making them losing competitiveness,” he said.

He cited food processors, which have agricultural produce as raw materials, as among those affected by high tariffs.

By restructuring tariffs, he said the country would have more broad based sources of growth that will enable job generation and growth in many sectors of the economy.

Also part of the review is the tariff on EVs.

Earlier this year, the government started the review of expanding the coverage of EVs enjoying reduced tariffs under Executive Order (EO) 12 to include hybrid vehicles and e-motorcycles.

EO 12, which took effect in February 2023, brought down the import duties of certain EVs and parts and components to zero from the previous five to 30 percent for a period of five years to encourage the shift to environment-friendly transport and encourage the development of the local EV industry.

“There was a consultation done by the Tariff Commission. They presented to us the recommendation. And then we would further discuss it with the Cabinet level,” Balisacan said.

As there are still some differing opinions on the tariff on EVs, he said the matter would have to be elevated to the NEDA Board.

“There are common agreements in many areas, including for example, for completely e-vehicles, (these) should continue to have zero tariff,” he said.

Trade Secretary Alfredo Pascual earlier said the inclusion of hybrid vehicles in the coverage of EVs enjoying lowered tariffs would not contribute to achieving the objective behind the reduced tariffs, as hybrid vehicles do not need infrastructure like charging stations.

Pascual said the objective of lowering the tariff on EVs under EO 12 is to increase vehicles with electric engines for purposes of encouraging the setting up of charging stations.

He said the government, however, would consider arguments raised by automotive firms for the inclusion of hybrid and plug-in hybrid vehicles in the coverage of EVs enjoying lowered tariffs.

Chamber of Automotive Manufacturers of the Philippines Inc. president Rommel Gutierrez earlier said EO 12’s coverage should include hybrid electric vehicles to make such vehicles more affordable and help accelerate the adoption of EVs.

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