The Philippines is prioritizing the use of local natural gas over imports to bolster the country’s energy security and reduce its reliance on global supply chains.
The Department of Energy (DOE) issued Circular 2025-09-0013, establishing a framework that gives preference to indigenous natural gas.
According to the DOE, the circular aims to provide a “conducive industry environment for the exploration, development and utilization of indigenous natural gas” through competitive, market-driven pricing. It also seeks to attract investment in imported liquefied natural gas (LNG) as a viable business in the Philippines.
The move is expected to provide a more secure supply of energy for both power generation and non-power applications.
The DOE said that using indigenous gas would minimize transportation and distribution costs, ultimately reducing prices for consumers. The circular is also designed to promote and accelerate the exploration and development of domestic gas resources.
Under the new guidelines, the pricing of indigenous natural gas will be determined by an agreement between contracting parties, based on a formula that includes an index to international crude oil, LNG, or liquid fuel prices. The formula will use a six-month average and be subject to quarterly price adjustments.
If the price of indigenous natural gas exceeds the six-month weighted average of the landed cost of imported LNG from the spot market, gas users have the option to temporarily purchase imported LNG for up to three consecutive months. This is subject to existing contractual obligations and a review by the DOE.
The circular introduces the concept of “aggregation,” where entities known as “aggregators” will combine indigenous natural gas with imported LNG to sell to buyers in the Philippines or abroad. The DOE will determine the need for aggregation and issue guidelines on requirements, the minimum percentage of indigenous gas for aggregation, and the pricing mechanism.
The new policy also requires suppliers and aggregators to provide “fair and open access” to their gas supply in a non-discriminatory and transparent manner.
They should also offer a uniform price to all qualified customers, and if demand exceeds supply, gas will be allocated on a pro-rata basis based on the customers’ power generation capacities.
To oversee these new rules, the circular calls for the creation of an Indigenous Gas Prioritization – Review and Evaluation Committee (IGP-REC) to review and evaluate supplier pricing methodologies.
The circular is in line with Republic Act No. 12120, or the “Philippine Natural Gas Industry Development Act,” which also prioritizes indigenous gas to achieve greater energy security and promote fair competition and transparency within the industry.
