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Tariff reductions approved for imported EVs, components, and deboned meat by PBBM

To help the country’s EV market, President Ferdinand R. Marcos Jr. has granted a temporary reduction in tariff rates on imported electric vehicle (EV) parts and components.

After the National Economic and Development Authority (NEDA) Board approved the temporary lowering of the Most-Favored Nation (MFN) tariff rates on selected EVs and their parts and components for five years on November 24, 2022, Marcos signed Executive Order (EO) 12 on January 13.

For a five-year period, EO 12 will temporarily cut the MFN tariff rates on fully built-up units of some EVs, including passenger cars, buses, minibusses, vans, trucks, motorbikes, tricycles, scooters, and bicycles.

However, hybrid-type EVs are exempt from the EO.

According to EO 12, the tariff rates on a few EV parts and components would also be reduced from 5% to 1% for a period of five years.

The EO intends to aid in the adoption of new technologies and to persuade people to use electric vehicles as a more environmentally friendly mode of transportation.

EO 12 states that the State shall ensure the nation’s energy security and independence by lowering dependency on imported petroleum for the transportation sector, citing RA 11697 or the Electric Vehicle Industry Development Act.

The EO said that the state has a responsibility to protect citizens’ health and well-being from the dangers of pollution and greenhouse gases.

It further said that “Under RA No. 11697, the State shall provide an enabling environment that supports the development of electric vehicles, including choices for micro-mobility as a desirable and practical means of transportation.”

34 percent of the nation’s emissions of greenhouse gases and air pollutants are attributed to the transportation sector, with 80 percent of those emissions coming from road transportation.

After it becomes effective, EO 12 will be in full force and effect for five years.

Retention of tariffs on deboned beef

The import duty rates on mechanically deboned meat (MDM) of chicken and turkey were temporarily modified by Marcos’ EO 13 on January 13 as well.

To “guarantee the continuous supply of important food goods at affordable costs, diversify the country’s market sources, and assist enterprises in recovering and maintaining their operations,” EO 13 maintains the temporary 5-percent tariff rates on MDM poultry until December 31, 2024.

The coronavirus disease 2019 (Covid-19) pandemic, together with other issues hurting the nation’s traditional sources of MDM chicken and turkey, “create uncertainty in the steady supply of those commodities,” according to the EO.

The country and the Filipino people face economic and trade ramifications as a result of the high inflation brought on by supply limits, the anticipated shortage in the global supply, and the rise in international commodity prices, according to EO 14.

Most low-income households enjoy processed meat products, especially since mechanically deboned beef is an essential ingredient in the production of hot dogs and canned luncheon meat.

2019 saw the release of EO 82 by former President Rodrigo Duterte, which directs the reduction of MFN duties on imported MDM poultry until December 31, 2020. In order to extend the validity of the reduced tariff rates under EO 82 through the end of December 2022, he later issued EO 123 in 2021.

After one year of the order’s execution, the MFN tariff rates are to be reviewed in accordance with EOs 12 and 13, and the NEDA is required to report its conclusions and suggestions to the President via the Office of the Executive Secretary.

On the proposal of the NEDA and in the interest of the public good and national security, the President may raise, lower, or abolish the current import duty rates under Section 1608 of RA 10863, also known as the Customs Modernization and Tariff Act.

A copy of EO 12 was made public by Malacaang on Thursday. It goes into force 30 days after it has been fully published in the Official Gazette or a newspaper with wide distribution.

In the meanwhile, EO 13 goes into effect right away following its entire publication in the Official Gazette or in a newspaper with wide distribution.

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This article is for informational purposes only and does not constitute endorsement of any specific technologies or methodologies and financial advice or endorsement of any specific products or services.

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