When the Alternative Fuel Vehicle Incentive Act (AFVI) was approved last January 29 after going through its third and final reading in the Senate, most of us breathed a huge sigh of relief. We’ve been holding our breath (pun intended) for a bill that promotes clean energy, clean air and green jobs, and the one authored by Ralph Recto seems almost perfect.
Basically, the bill seeks to exempt all hybrids and electric vehicles, as well as those powered by either CNG, LPG, wind, solar or any other approved alternative fuel, from excise tax and VAT, among other incentives, to bring the prices of a hybrid or electric vehicle to somewhere within the vicinity of its gasoline counterpart––which in the case of a Prius C, would be somewhere just under a million pesos.
And as a thank you for making a cleaner, greener choice, the bill seeks to reward you by dropping the Motor Vehicles User Charge (MVUC), which is a significant sum that is automatically built into your registration costs, as well as exempt your vehicle from coding. And as an added bonus, there’s even a provision for providing free parking in all new establishments.
Also, because the exemption of taxes include raw materials, it also allows local manufacturers to build affordable electric jeeps, tricycles and busses, dramatically reducing the deafening sounds of loud exhaust pipes and clattering diesel engines, and bringing us one step closer to that evasive electric dream of clean, fresh air.
“If the Bill finally will be passed into law, it will lure investors to choose the Philippines as a more viable country in the region, a measure that is crucial to the Electric Vehicle Industry’s launch as it passes currently a sensitive stage of development.” Rommel T. Juan, Chairman and President of the Electric Vehicle Industry Association of the Philippines, (EVAP), said in an official statement Monday.
So what’s the catch? Well, without a bicameral conference comittee, which is the final step before it is passed into law, the bill remains just that: a bill. And an extremely expensive one that none of us can afford to pay––but will eventually do so with our health, the earth, and our reputation as one of the most environmentally irresponsible countries on earth.
Which begs the question: If it is such a great law, and the Senate has already nominated senators who will constitute the Senate's Bicam members, why can't the House form theirs?
During an exchange of messages recently, Senator Juan Miguel Zubiri told me “The Department of Finance says that they will lose an estimated 1 billion in tax revenues, but they don't see the potential of new industries that would be created because of this new law. New industries mean new jobs and more jobs for the people.”
Senator Ralph Recto also expressed his concern in a phone call just minutes before this column went to print, also citing the department of Finance as the only hurdle in getting the bicam to push through. He explained the value of the bill and called on the public and media alike to support its passage, and urged the Department of Finance to reconsider their position and work together with both the Senate and Congress for the sake of the environment.
“The bill has a sunset clause in it. We’re only talking about 9 years of tax exemption, after which, everything can be revisited.” Recto explained with traces of frustration and desperation in his voice, as his bill, which he has spent countless man hours, not to mention tax payers money, faces the almost ironic prospect of going up in smoke.
But while Senator Recto sees the window shrinking, he insists that there is still hope. There are still three sessions in June to hold a bicam and ratify the bill before a new congress sits on June 30, otherwise the bill gets junked and it needs to start from scratch, despite it already passing through both congress and senate.
And this is where you can help. If you want clean air, clean vehicles, green jobs and zero emission public utility vehicles in the near future, speak up now. Make your voice, and more importantly, your vote count. Clean air doesn’t come cheap, and as concerned voters during an election period, you now have the power to make our government pay for it.
If we go by Senator Zubiri’s and Senator Recto’s suggestions that the bill is being held up by the Dept of Finance simply because of fear of lost revenue, which has basically put a price tag on our lives, perhaps the DOF would like to take into account the monetary cost that pollution has on health care and productivity.
Every hour, Philippine motor vehicles consume 2.029 million liters of gasoline and release 2,200 metric tons of carbon dioxide into the air, which equates to Php 53,000 that the government needs to cough up every 60 minutes to treat pollution-related diseases and to compensate for productivity losses.
“About 65 percent of drugs purchased by the health department every year were for treatment for respiratory diseases,” Environmental Secretary Ramon Paje has been quoted saying in several published interviews when discussing Metro Manila’s air pollution problem caused by vehicles.
In a speech before the Development Summit in New Delhi earlier this month, Climate Change Commissioner, Heherson Alvarez said, “The World Bank estimates that some 5,000 annual premature deaths make up 12 percent of all deaths in Metro Manila, the highest of any region in the Philippines, due primarily to respiratory and cardiovascular diseases from exposure to air pollution,”
This has been valued at over US$1.5 billion in lost wages and medical treatment and doesn’t even take into account the income lost from a reduction in tourism, loss of foreign investments, vegetation, quality of life and even damage to buildings and structures that require regular and expensive painting to keep them from looking like something that Lucifer’s lives in.
So a billion pesos in lost revenue? That will barely cover the court costs.
According to Babes Romualdez, in his Philippine STAR column, Spybits, entitled “Metro Manila’s deadly air”, “The Philippine Medical Association are preparing to file a P1-billion class action suit against the DOTC and Secretary Mar Roxas for the alleged failure in enforcing the Clean Air Act, with smoke belching buses, trucks, jeepneys and other vehicles freely traversing the streets despite emission tests being mandatory prior to vehicle registration.”
But having said that, as fantastic as the bill is for the environment, I do see a few areas of concern. While I’m a hundred percent supportive of this bill, obviously, there are legitimate points that need to be addressed and provisions that should be inserted if we want to get the best out of it.
Firstly, the bill should be also emission based rather than purely technology based. While hybrids and EVs are a huge step in the right direction and should be given every possible tax break, this shouldn’t penalize small gasoline-powered cars that have similar or smaller carbon footprints. For example, a 1-liter Ecoboost Fiesta or Mitsubishi Mirage will use significantly less gas than a Cadillac Escalade hybrid, and should not be penalized simply because it chooses a different technology to arrive at the same destination.
Once again, I agree that hybrids and electric vehicles should be completely tax free, but to be completely fair, provisions should also be set up in the bill for small-engined vehicles; perhaps the taxes should be based on carbon emissions and fuel consumption rather than the technology alone.
Case in point, LPG. Yes there is a reduction in emissions, and they should enjoy some incentives, but this is only the case for properly fitted systems. I have seen some real hack jobs done on taxis and fleet cars that actually doubled the fuel consumption and increased emissions.
The only way I can see an LPG vehicle enjoying tax breaks is if it were factory installed from new, and still, it should not enjoy exactly the same perks as a zero emission vehicle like a Nissan Leaf or Mitsubishi i-MiEV.
And lastly, there should be a clear program developed, as early as now, for proper battery disposal and recycling. We don’t want to turn around in ten years once most of them start hitting their use by date and appear shocked, no pun intended, when we see them being dumped in landfills.
But however imperfect it may be, the bill is still a massive stride in the right direction and I appeal to the House of representatives to prioritize it before we miss that small window in June before the new congress sits. We’ve come this far, let’s not let the whole thing go up in smoke for the sake of revenue. There’s a much bigger picture, and all it takes are a few good men and women to put this to a bicam and then pass it in to law. And then we can all breathe a lot easier.
The power of social media has given everyone an equal voice. Let’s use it now. We’re so close. Let’s not let this slip away simply because of money. This shouldn’t be about dollars but sense. We’ve made mother nature our slave for too long now; it is time we start taking care of her. God forgives. Man forgives. Nature doesn’t. And we all know what they say about a woman scorned.
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- The 15th Congress of the Philippines
The House of Representatives
Pass the Alternative Fuel Incentives Act (AFVI) now
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