About two weeks before this conversation, the Philippine government removed the tariffs on imported two- and three-wheeled electric vehicles. Four-wheeled vehicles had already been cut the year before. Charging stations are covered too, and the window runs five years.
The measure applies to imports from anywhere in the world, not to any one supplier country. Chinese manufacturers happen to be the ones moving fastest on it: Glenn Penaranda, Commercial Counsellor at the Philippine Trade and Investment Center, describes them as very aggressive, and they are already in the market.
The logic he gives for giving up the revenue is a chain with battery manufacturing at the far end of it. Cheaper vehicles make EVs affordable to the population. Affordability builds a fleet. A fleet is the scale that would eventually make local battery manufacturing a viable proposition.
It is a policy that starts at the consumer end and works backwards towards the factory.
The offer to manufacturers is metal, not market
The demand side is speculative. The supply side already exists.
The Philippines sits behind Indonesia as the second largest nickel producer, with copper and cobalt alongside it, and Penaranda says shipments to China account for around 60% of that country's requirement. He calls the Philippines one of the most mineralised countries in the world.
The problem is the shape of the trade. Two HPAL facilities operate in the country, so some processed material does go out, but much of the nickel production still leaves as ore. The stated ambition is to move further along the chain and make precursor materials at home, the ones that feed cell manufacturing.
Reserves are large enough that the government wants more exploration, and it is looking well beyond its existing customer. Penaranda lists American, European, Australian, Canadian, Japanese and Korean companies as parties the government has been talking to about exploring, mining and processing in the country. At government level he mentions work with the US, the EU, Japan and Australia. The argument he makes for those partners is that they hold both the technology and the end market for Philippine material, and that the domestic industry is open to working with them.
Alongside that, the government is developing a minerals roadmap with the industry, meant to be useful to investors as much as to policymakers. In the meantime, a good deal of the work is introductions: putting potential partners in front of the companies that hold the resource, so that at least some engagement is under way.
Two changes that already moved money
The renewable energy side is where the policy has been tested.
Foreign equity rules were relaxed for renewables, solar and wind in particular, and Penaranda credits that directly with the results: the biggest projects that came to the Philippines last year were in these sectors, mostly from European companies. Chinese firms were in the conversation as well, strong on equipment, and he notes the sense in assembling near the farms themselves, which would also create work for the port facilities serving those sites.
For manufacturing there is now an incentive scheme allowing 100% foreign ownership.
Mining is the piece that has not been fixed yet, and he does not pretend otherwise. Permitting for mining projects can take time. Initiatives are under way to simplify and streamline the procedures, on the reasoning that companies have to be able to move quickly, do exploration and get a mine ready in a shorter period. He gives no timeline for that reform.
The route in runs through an office in your capital
The mechanics of investing are the part of this that is rarely spelled out, and Penaranda spells them out.
His office is one of about 30 Philippine Trade and Investment Centers placed in key capitals, in the countries where the Philippines does most of its business. They take the first enquiry. Once an interest is registered, the office links the company to the Board of Investments back in the Philippines, which handles it through due diligence. If the company decides to go further, the overseas office arranges visas, prepares an itinerary and organises the visit.
His description of the arrangement is a front line abroad with a full team at home.
Batteries sit between the two other commitments in the pitch. On one side, a larger renewable share in the electricity mix, where storage is what makes the electricity manageable once the generation is variable. On the other, green mobility, which is what the tariff removal is for.
The closing argument is not about volume. Penaranda's case for promoting the industry now is value-adding. Extract the minerals, yes, and then keep some of the processing, and the benefit, inside the country and in the communities where the mines are.
This piece draws on the full conversation, which is available with a complete transcript on the episode page.