The Philippines has entered the increasingly competitive electric vehicle market blossoming in its neighbourhood by unveiling a $1 billion subsidy programme aimed at accelerating domestic EV manufacturing, attracting foreign investment and transforming the country into a regional automotive production hub.
President Ferdinand Marcos Jr. signed the decree on July 29, as Nikkei Asia reports, establishing a new policy framework designed to expand local electric vehicle production and strengthen the country's automotive sector.
The initiative builds on a 2022 policy that eliminated import duties on fully assembled electric vehicles and key components, a move intended to encourage consumer adoption and create demand for EV technologies.
The new programme, known as the Electric Vehicle Incentive Strategy (EVIS), will provide direct government co-funding for capital investments, including research and development activities and workforce training.
Under the scheme, the government will cover up to 40% of eligible costs for fully battery-powered EV models and related components, while hybrid, plug-in hybrid and fuel-cell vehicle projects will qualify for up to 30% co-funding.
The programme introduces strict requirements for participating manufacturers. According to the decree, companies seeking support can qualify through either a financing framework requiring a minimum capital investment of 5 billion Philippine pesos (around $81 million) or by committing to produce at least 10,000 electric vehicles.
Riding regional wave
The Philippines' move comes as Southeast Asia becomes a major global battleground for electric vehicle investment, with governments across the region competing to attract foreign manufacturers and establish domestic supply chains.
Automotive leaders such as Thailand and Indonesia have drawn significant investment through a combination of tax incentives, local production requirements and access to critical raw materials, including Indonesia's large nickel-processing industry.
Although the Philippines remains a smaller EV market compared with Thailand, Indonesia and Vietnam, sales have been growing rapidly as international brands expand their presence.
Vietnam's VinFast, for example, surpassed Tesla in domestic sales among reporting automakers during the first half of 2026, highlighting rising consumer interest in electric vehicles.
Across Southeast Asia, governments are increasingly seeking to convert growing EV demand into local manufacturing capacity. Thailand has attracted companies such as BYD through subsidies, tax incentives and localisation requirements, while Vietnam has promoted EV adoption through various government support measures.
The Philippines' new EV strategy follows the same regional trend, aiming to localise production, strengthen supply chains and position the country as part of the expanding Asian electric vehicle industry.
The Philippine subsidiary of Japan's Mitsubishi Motors welcomed the announcement, describing it as a "significant step toward accelerating vehicle electrification, strengthening local automotive manufacturing, and supporting the continued growth of the Philippine automotive industry."
Mitsubishi had previously indicated its intention to participate in the programme, announcing in April a 7 billion peso (approx. $113 million) investment to produce a new hybrid vehicle model at its Laguna facility south of Manila by mid-2028.
By Nazrin Sadigova
