RENEWABLE ENERGY (RE), particularly when applied to electric vehicles (EVs), will be a bright spot for growth in the Philippines, the World Bank said.
“I think one area that is really exciting is a broad area of RE. In particular, the EV subsector. The Philippines happens to be endowed with critical minerals,” Ndiamé Diop, World Bank Country Director for the Philippines, said at a conference on Tuesday.
“With a very good policy framework, going beyond extraction but processing the minerals here and (forging) smart partnerships with investors to produce here, I see this sector as having a great potential not only in boosting growth but also creating green jobs,” he added.
The Department of Energy has said that the Philippines is on track to increase its share of RE in the power generation mix. The target for RE share is 35% by 2030 and 50% by 2040.
RE accounted for 22.1% of the Philippines’ energy mix at the end of 2022. Of this, coal-fired power plants accounted for 59.6%. Natural gas accounted for 16% and oil-based energy sources 2.3%.
Policies expected to promote growth include the amended Public Service Act (PSA), Mr. Diop said.
“What is really exciting is some of the liberalization reforms that have been initiated and discussed… I will highlight one of them: the PSA. I think this is a banner reform,” he said.
“If fully implemented, it will open up key sectors to competition and investment. And the gains will be transmitted across the whole economy,” he added.
Mr. Diop said liberalizing the transportation, telecommunications, and energy industries “improves competition and promotes new investment.”
“Some analysis done recently showed that if it is fully implemented the productivity gain across the economy (will be) significant,” he added.
In March, the government released the implementing rules and regulations (IRR) for Republic Act No. 11647, which amends the 85-year-old PSA.
The law effectively allows full foreign ownership in telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports. These industries were previously subject to the 40% foreign ownership cap for public utilities.
“The PSA amendment’s full implementation… requires two things. One is a general IRR, which has already been enacted. Now for the reform to be fully implemented you need to get into all these sectors that are liberalized and get IRRs at the regulatory, sectoral (level),” Mr. Diop added. — Luisa Maria Jacinta C. Jocson