Rising fuel prices drive Cebu demand for EVs

CEBU, Philippines — Surging fuel prices triggered by escalating tensions in the Middle East are accelerating demand for electric and hybrid vehicles in Cebu, with banks reporting a sharp increase in loan applications for so-called “new energy vehicles” as consumers seek alternatives to gasoline-powered cars.

Executives from BDO Unibank said rising oil prices linked to the US-Iran conflict are beginning to reshape consumer spending and investment behavior, driving stronger interest in electric mobility and renewable energy products such as residential solar systems.

“Because of this Middle East crisis, we’re seeing growth in hybrid and electric vehicles. The other is solar panels,” Fritz Ocampo, chief investment officer at BDO Unibank, said during an economic briefing at the newly opened BDO Tower Fuente on May 26.

The briefing reflected broader concerns among financial executives that geopolitical instability and elevated energy prices could slow Philippine economic growth in 2026 while prompting more cautious consumer and corporate spending.

At the same time, banks and insurers are beginning to see new pockets of demand emerging from the energy transition.

Yves Mañacap, team lead of BDO Central Visayas’ auto loans division, said applications for loans tied to electric and hybrid vehicles in Cebu had been steadily increasing over the past several years before accelerating sharply following recent fuel price hikes.

“For the past years, there had been steady growth in auto loans for new energy cars in Cebu,” Mañacap said. “Then it spiked days after gasoline prices increased significantly.”

Industry executives said plug-in hybrid electric vehicles, or PHEVs, have emerged as the most in-demand category among Cebu borrowers, based on recent financing applications.

Unlike conventional hybrid vehicles, PHEVs combine internal combustion engines with rechargeable electric batteries that can be plugged into external power sources, allowing motorists to rely primarily on electricity for shorter daily commutes before shifting to gasoline when needed.

The growing interest in electrified transport in Cebu mirrors broader national sales trends.

Data from the Chamber of Automotive Manufacturers of the Philippines Inc. and the Truck Manufacturers Association showed sales of electrified vehicles reached 6,148 units in March, accounting for about 17 percent of total vehicle sales during the month.

While gasoline-powered vehicles still account for the bulk of auto loans in Cebu, lenders said the balance could shift further as consumers grapple with persistent fuel volatility and rising transportation costs.

“With the current trend, we’re expecting that new energy cars will soon take up most of the shares of auto loans,” Mañacap said.