Higher pickup prices loom on the horizon after President Ferdinand Marcos Jr. signed Senate Bill No. 2865, known as the Capital Market Efficiency Promotion Act (CMEPA), on May 29, 2025. The legislation was approved with partial vetoes, but the removal of the excise tax exemption on pickup trucks remains in the signed version.
The prevailing excise taxes on vehicles are based on the Tax Reform for Acceleration and Inclusion Act or TRAIN. An excise tax rate ranging from 4% to 50% is levied on the importer or manufacturer selling price (excluding shipping and other fees) as follows:
Excise taxes on vehicles based on TRAIN
- 4% for vehicles with an importer selling price of P600,000 and below
- 10% for vehicles with an importer selling price above P600,000 to P1 million
- 20% for vehicles with an importer selling price above P1 million to P4 million
- 50% for vehicles with an importer selling price above P4 million
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Hybrids are still subject to a 50% reduction of the above tax rates, while fully electric vehicles remain exempt from excise taxes.
In 2022, the Department of Finance proposed removing the excise tax exemptions for pickups as part of its tax reforms. Benjamin Diokno, who then served as the Finance secretary, said that the exemption was originally granted because pickups were regarded as “workhorses for small business owners and professionals in their livelihood,” but “manufacturers modify their pickups to serve as passenger, leisure, or sports utility vehicles.”
Once excise taxes are imposed on pickups, we expect their prices to move closer to those of their SUV counterparts. It will take some time for the implementation of CMEPA to take effect—we’ll be waiting to see if it triggers panic buying among those who have plans to purchase pickups this year, and if it will further affect local car sales, which already saw a month-on-month decline in April 2025 versus the same month last year.
You can check out the full copy of CMEPA here.
