DOE, DTI push EO promoting use of indigenous fuel

The Department of Energy (DOE) and the Department of Trade and Industry/Board of Investments (DTI/BOI) have jointly endorsed an executive order (EO) to further promote the use of indigenous alternative fuel in the transport sector.

Energy Secretary Raphael P.M. Lotilla said this initiative is consistent with the government’s thrusts of energy independence and sustainable growth.

Lotilla said the NEDA Board has already endorsed for approval by the President the new EO which will modify the rates of import duty on components, parts and accessories for the assembly of vehicles powered by alternative energy sources such as biodiesel, bioethanol, compressed natural gas (CNG) and electricity.

Once approved, the EO shall provide the grant of preferential Most Favored Nation (MFN) and Common Effective Preferential Tariff (CEPT) rates of zero percent on the importation of items that qualified Motor Vehicle Development Program participants use for the assembly or manufacture of hybrid, electric, flex-fuel (bio-ethanol and bio-diesel) and CNG vehicles.

Current rates of import duty for motor vehicle parts and components are one percent and three percent for MFN and CEPT, respectively. CEPT, rate applies for imports from the ASEAN countries while the MFN rate applies for imports coming from non-ASEAN countries.

Upon approval, the BOI, pursuant to its Motor Vehicle Development Program, shall issue guidelines to implement the preferential tariff privilege. The Motor Vehicle Development Program aims to promote the country as the manufacturing hub for motor vehicles and motor vehicle parts and components in the ASEAN region.

The development and promotion of indigenous alternative fuels is one of the key pillars of the Arroyo Administration’s energy independence agenda.

Lotilla said aside from energy conservation, the surest way to insulate the economy from the oil factor is through the use of indigenous alternative fuels.

In addition to its contribution to economic growth, he added that the use of alternative energy sources will likewise improve the air and promote investment and employment opportunities especially in the agricultural sector.

Once the EO is signed, the energy chief said the government hopes to encourage more active participation from the automotive industry in mainstreaming alternative fuels. Recently, Ford announced that it will build $20-million flexible fuel factory in the Philippines, its first in Asia.

"We hope other vehicle manufacturers will follow Ford’s lead. Demand projections clearly point to increased utilization of alternative transportation fuels in the 21st century. They need to seize this opportunity if they want to survive," Lotilla said.