“The Philippine government has been fostering a conducive business environment to attract investments in renewable energy projects”
Energy security is essential for a nation’s economic stability and growth.
In the Philippines, a consistent and affordable power supply underpins all the vital sectors of the economic spectrum like manufacturing, public transportation, and healthcare.
The productivity and efficiency of these sectors rely on a stable energy source, benefiting both businesses and consumers by minimizing disruptions.
As the country transitions from traditional fossil fuels to renewable energy, liquefied natural gas (LNG) emerges as a critical cleaner transitional bridge fuel for generating electricity.
Energy security, as defined by the United Nations, is “the continuous availability of energy in varied forms, in sufficient quantities, and at reasonable prices.”
A reliable energy supply maintains economic productivity, public safety and convenience.
When power outages occur, industrial operations, public services, and the lives of affected consumers are abruptly disrupted.
The Malampaya gas field, the country’s only indigenous source of natural gas, currently supplies about 12 percent of Luzon’s dependable capacity, powering four major power plants with a total 2,081 MW.
However, with new drilling efforts to extend its lifespan yet to commence, there is an urgent need to shift to imported Liquefied Natural Gas (LNG) to meet fast growing energy demands.
Utilizing LNG for power generation not only ensures a stable power supply but also reduces greenhouse gas emissions by 50 percent, making it a more environmentally friendly option compared to other fossil fuels.
A Pulse Asia Survey commissioned by the Stratbase Institute revealed that 85 percent of Filipinos support increasing the use of renewable energy sources like solar, wind, and hydropower.
Driven by technological improvements, large-scale investments, and supportive policies, the long-term outlook of experts remains positive with continued decreases in costs.
Encouragingly, the Philippine government has been fostering a conducive business environment to attract investments in renewable energy projects.
During the Philippine Economic Briefing in May 2024, Department of Energy Assistant Secretary Mario Marasigan highlighted the government’s efforts to make energy investments more appealing to both local and foreign investors.
The Philippines has opened up 100 percent foreign investment in developing renewable energy resources.
The DOE views natural gas as a supportive technology for renewable energy, monitoring seven LNG facility projects, two of which are nearing completion.
These initiatives signify the government’s commitment to integrating LNG into the broader energy transition strategy.
The expansion of the LNG industry in the Philippines promises substantial economic benefits.
One of the key advantages is in infrastructure development.
The construction of LNG import terminals, pipelines, and distribution networks will create opportunities across construction, engineering, and logistics sectors.
Additionally, developing LNG infrastructure is expected to generate stable and well-paying jobs across various sectors, boosting local economies and contributing to poverty reduction by increasing household incomes benefiting from this multiplier effect
As the Philippines emerges as a growing LNG market, there will be opportunities for technology transfer and enhanced trade relations.
This can improve local technology standards and greater economic integration with global markets.
Reliable electricity ensures smooth business operations, reducing downtime and increasing output.
The stability of power supply will bolster the country’s competitiveness and the confidence of potential foreign investors to choose the Philippines for as the next location of their enterprises.
Despite these potential benefits, the LNG industry faces challenges, particularly regarding the volatility of global LNG prices.
Addressing these challenges will need strategies to mitigate the impact of fluctuating LNG prices such as long-term supply contracts and diversifying LNG suppliers to ensure competitive pricing and supply stability.
The integration of LNG with existing fossil fueled and renewable energy sources offers a balanced approach to the country’s energy transition in alignment with the global aspiration towards zero carbon emissions.
With continued government support and investments from the private sector, the Philippines is well-positioned to leverage LNG as a pillar of its power and energy mix.
The growth of the LNG industry in the Philippines represents a significant opportunity to enhance energy security and drive economic growth.
By developing LNG infrastructure as a key solution to ensuring stable energy supply, the Philippines can achieve a more resilient and prosperous economy.
For a deep dive into the dynamics of developing LNG infrastructure as a strategic component of the Philippine energy mix, I invite you to log-in to the hybrid conference organized by the Stratbase ADR Institute, in partnership with CitizenWatch Philippines with the theme, “Advancing Energy Security: Fueling Sustainable Progress with Liquefied Natural Gas”.
This is happening tomorrow, Tuesday, June 18, 2024, 9am to 11:30am. Registration is free thru this link:
