A Philippine law aimed at developing the country’s natural gas industry and promoting natural gas as a safe, efficient, and cost-effective source of energy has been signed by President Ferdinand Marcos Jr.
Republic Act (RA) 12120, or the Philippine Natural Gas Industry Development Act, seeks to promote natural gas as a reliable fuel for power plants and an indispensable contributor to the country’s energy security by establishing the Philippine Downstream Natural Gas Industry (PDNGI).
The measure was signed on Jan. 8, 2025 but was only made public yesterday.
The law seeks to promote the conversion of existing fossil-fuel operated equipment and facilities to natural gas use, provided that it is technically and financially feasible.
It also provides incentives to boost investments in the Philippine natural gas industry by allowing the entry of investors under a system of competition, transparency and fair trade, and by providing responsive policy support to attain low-cost energy prices, pursuant to RA 7638 or the Department of Energy Act of 1992.
RA 12021 is also seen to help the Philippines meet the increasing local demand for fuel, and develop the country as a liquefied natural gas (LNG) trading and transshipment hub within the Asia-Pacific Region.
It also provides for the development of power and non-power end-uses of natural gas which includes commercial, industrial, residential and transport applications that promote fuel diversity.
The Department of Energy (DOE) will be the lead agency to determine the need for and regulate the development of aggregation in the country or the procurement of indigenous natural gas, combining it with imported LNG, and selling the aggregated gas to gas buyers in the Philippines or abroad.
The DOE could also evaluate, approve and issue the permits necessary for the siting, construction, operation and maintenance, expansion, modification, rehabilitation, decommissioning and abandonment of any PDNGI facility or activity.
The operation of the PDNGI facility is determined through an evaluation process for possible inclusion and entitlement of incentives under the Strategic Investment Priority Plan.
DOE shall also formulate the Philippine Downstream Natural Gas and Distribution Code, which shall serve as the performance standards for operating a conventional and virtual distribution system, and a Philippine LNG Storage and Regasification Terminal Code that shall set the performance for operating LNG Storage Regasification Terminal.
The law also taps the Joint Congressional Energy Commission (JCEC) to exercise oversight function on the implementation of the law for five years, starting from the effectivity of the law, and directs DOE, the Energy Regulatory Commission and other relevant agencies to submit to the JCEC every 15th of September of each year an annual report on the implementation, reviews and policy regulation issues concerning the law.
The Marcos government has committed to increase the use of alternative sources of energy in the country.
Under the 2020-2040 Power Development Plan, the Philippines aims to increase its energy mix to 35 percent by 2030 and by 50 percent in 2040.
