The Department of Energy expressed optimism the issuance of clear policies will spur the entry of more investors in the country’s energy sector.
“I am confident that this trend will continue as we reaffirm to prospective investors the openness of our economy to foreign and local investors and assure them of the continued stability of our legal framework, especially in the upstream oil and gas sector,” Energy Secretary Raphael Lotilla said during Tuesday’s investment forum.
He said the DOE’s Investment Promotion Office had been continuously conducting activities on various platforms to provide both prospective and existing investors updates on the energy situation and outlook, including recent policies, the current energy regulatory framework, and financing facilities available that may firm up or further intensify investments in the energy sector.
“I wish to stress the President’s marching order for us at DOE and our partner agencies in the government to ensure a level playing field,” Lotilla said.
“With these developments, we encourage investors to join us in steering the energy industry toward a cleaner, greener, reliable, and more sustainable future,” he said.
Lotilla said among the policies issued by the DOE is opening renewable energy to 100 percent foreign ownership based on a recent opinion by the Department of Justice.
“The opinion accelerates the attainment of President Ferdinand Marcos Jr.’s programs to develop the country’s indigenous and renewable energy,” Lotilla said.
He said Department Circular No. 2022-11-0034 prescribing the amendments to Section 19 of the Implementing Rules and Regulations of the Renewable Energy Act of 2008 is already in effect.
“The circular emphasized that the following activities will be reserved to Filipinos or corporations with at least 60 percent Filipino ownership, particularly the appropriation of water direct for a natural resource based on Presidential Decree No. 1067 and the exploration, development, and utilization of geothermal resources except for financial or technical assistance agreements,” Lotilla said.
He said these recent development paves the way for the entry of more investments in the development and implementation of offshore wind energy projects, which has a potential of 178 gigawatts.
Lotilla said the President had given the “green light” to proceed and firm up the regulatory framework for offshore wind.
He said also DOE increased the Renewable Energy Portfolio Standards from one percent to 2.52 percent, increasing RE utilization in on-grid areas.
“Further, the qualified and registered renewable energy generating units could now enjoy preferential dispatch in the Wholesale Electricity Spot Market,” he said.
Lotilla said DOE has also requested to lower the import tariff on coal to zero.
“The DOE coordinated with the Bureau of Customs for the tax rate to be levied on imported coal being utilized for power generation shall be computed based on transactional value as provided under the Customs Modernization and Tariff Act, instead of having a reference value,” he said.
“We hope that with this adjustment, the minimum cost reduction, when compounded, will contribute to the lowering of electricity rates, and therefore beneficial to all of us as consumers,” the energy chief said.
Lotilla said the government’s commitment to preserve and maintain the investment incentives for service contractors under Presidential Decree No. 87 had been met with renewed confidence and strong interest by local and foreign investors in the oil and gas sector.
The DOE recently allowed Nido Petroleum Philippines Pty. Ltd., the operator of service contract 6B and service contract 54, respectively, to conduct a site survey of their drilling locations in their service contract areas by the last quarter this year.
Lotilla said the DOE also approved the sale of Shell’s 45 percent interest in the Malampaya service contract 38 to Prime Infrastructure Capital, Inc. after a thorough review in accordance with PD No. 87.
“The new entrant is committed to maximize the utilization of the remaining natural gas in the Malampaya-Camago reservoir to develop the nearby gas fields. We see natural gas as a transition fuel to low carbon fuel,” he said.