The Philippines has been urged to further venture into opportunities in the electric vehicle (EV) space whose demand is expected to grow across the globe given the increasing shift to an environment-friendly lifestyle.
IHS Markit Executive Director Rajiv Biswas, in a recent briefing with the Board of Investments (BOI), said that the rising EV market will result in more demand for batteries whose primary components include nickel, a mineral that is largely available in the Philippines.
“Fundamentals are favorable for nickel due to strong long-term growth in global production of EVs and this is an exciting area for the Philippines,” Biswas said.
Over the next decade, he said global battery demand will “grow dramatically.”
“The Philippines could also seek to develop greater value-added by attracting investments into manufacturing of EV batteries as well as into EV-related auto manufacturing,” he added.
In the Philippines, the proposed Electric Vehicle Industry Development Act has yet to be enacted. The measure seeks to craft a road map for the local EV market, which covers EV specifications, charging stations and equipment, parts and components and batteries, among others.
Earlier, local and foreign business groups urged swift action on the part of the legislators for the said bill.
The bill will allow the country to have greater participation in the EV supply chain, they said, in addition to addressing health and environmental concerns. The value chain includes the components, batteries and charging stations.
The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act can also attract future investors in EV manufacturing given its incentives menu, the groups noted.
“Passage of the measure enables and supports the Department of Trade and Industry in its endeavors to promote the Philippines as a regional hub for EV manufacturing,” they added.
The number of registered EVs slid by 35 percent to 1,015 units in 2020 from 1,570 units in 2019. In 2010-2020, the country had 12,965 EVs registered with the Land Transportation Office (LTO).
These include mostly e-trikes (7,100) and e-motorcycles (4,845). Others are e-jeepneys (679), e-cars (276), e-sports utility vehicles (43), e-trucks (12) and e-buses (10).
Biswas also said that trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are crucial to expanding market access for the Philippines.
The economist said that RCEP can help the country diversify its supply chains, especially for the manufacturing sector, making it more competitive.
RCEP, which entered into force last month, is a free trade agreement among Asean countries and their trading partners, including Australia, China, Japan, New Zealand and South Korea. This represents 30 percent of the global gross domestic product (GDP) or $26.2 trillion.
The Philippines has yet to ratify the trade deal to enable its participation.
Meanwhile, CPTPP, which was signed on March 8, 2018, comprises Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.
“We have conveyed our interest with the parties to the CPTPP through our bilateral engagements and so far, we have been receiving supportive messages from them,” Trade Undersecretary and BOI Managing Head Ceferino Rodolfo said during the meeting.
Last year, the Philippines sent a letter expressing its interest to join the trade deal to New Zealand, the depository country of the CPTPP.