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The Department of Energy DOE formulated the Philippine Energy Plan (PEP) 2017-40, which establishes a comprehensive roadmap to ensuring sustainable, secure, sufficient and accessible energy. The Plan covers renewable energy, fossil fuels, downstream oil and natural gas, alternative fuels, power development, and energy efficiency and conservation. (...)

Malampaya gas field is the main source of gas and condensate, producing 99% of the country's gas. (...) The gas from Malampaya already fuels three major power plants, and provides feedstock for compressed natural gas-powered buses.

Natural gas is a key component of the Government's fuel diversification programme, and is considered one of the most viable and cleanest alternatives to oil, particularly for use in power generation. In October 2017, the DOE circulated its draft Rules and Regulations Governing the Philippine Natural Gas Industry to stakeholders for comments. This draft policy aimed to create a liberalized market, encourage investment in the gas sector, and transform the Philippines into a liquefied natural gas (LNG) trading and trans-shipping hub in the Asian Pacific region.

The biofuel industry in the Philippines has seen a rapid expansion. The Biofuel Act (RA 9367) set forth the mandatory requirements for using locally sourced biofuels: a minimum volume of 10% bioethanol must be blended in the gasoline sold in the country; for diesel, the minimum volume is 2%. The Act clearly requires that bioethanol must first exhaust domestic sources, and the volume of imported equivalent must not exceed the extent of the shortage as determined by the National Biofuel Board. [42]

[42] Article 5.2, the Biofuel Act.

Consumption of bioethanol continued to outstrip domestic supply, due to insufficient production capacity. In 2016, about 40% of total demand for bioethanol was met by domestically produced products (118.9 million litres). As of end-2016, there were 11 biodiesel and 10 bioethanol production facilities in the country. Biodiesel production reached 225.9 million litres, while bioethanol production reached 230.2 million litres. In 2016, the DOE approved three biofuel production facilities: Emperador Distillers, Inc., with a total annual rated capacity of 66 million litres of bioethanol; Bio Renewable Energy Ventures Inc. and Archemicals Corporation with total annual rated capacity of 90 million litres of biodiesel.

Renewable energy (geothermal, hydro, wind, biomass, and solar) makes up the rest of the installed capacity of the country (accounting for about 34.3%). The DOE issued the National Renewable Energy Programme (NREP), with the aim of diversifying and expanding renewable energy. Under the NREP, the Philippines aims to double the 2010 installed capacity of renewable energy sources by 2030, which implies an increase from 5,438 MW in 2010 to 15,304 MW in 2030.

As of end-June 2017, the DOE had awarded 831 Renewable Energy Service Contracts (RESCs), with an aggregate potential capacity of 21,938 MW. Among the awarded projects, hydropower accounts for the largest potential capacity (13,419.7 MW), followed by solar (5,181.7 MW) and wind (2,381.5 MW).

In order to encourage development of renewable energy, a Feed-In Tariff (FIT) system was introduced, and became operational in August 2010. FIT is a non-fiscal incentive scheme that offers guaranteed payment at a fixed rate for electricity sales for qualified renewable energy producers; it is administered by the ERC. The authorities indicated that FIT rates will be adjusted periodically in order to maintain a balance between an acceptable rate of return for producers and end-use pricing for consumers; but new rates are applied only to the projects approved and operational after the new rates are promulgated. Currently, the FIT rate for solar power is PHP 8.69/KWh, for wind power PHP 7.40/KWh, for biomass PHP 6.59/KWh, and for hydropower PHP 5.87/KWh.

(...) In addition to adjusting FIT rates, the ERC periodically reviews the installation targets under FIT. For instance, the installation target for FIT preference for solar power was increased ten-fold from 50 MW in 2012 to 500 MW in 2016; for wind power by 100% from 200 MW to 400 MW.

In order to qualify for the FIT scheme, producers must meet certain eligibility criteria and obtain a certificate of eligibility from the DOE. [44] Once the applications have been vetted, certificates of eligibility are issued on a first-come-first-served basis, regardless of the size of the project. Some observers argue that this competition to access FIT preferences will push out smaller firms that are traditionally drivers of renewable energy in new markets. As of 30 June 2017, the DOE issued certificates of eligibility to the ERC for a total capacity of 1,079.6 MW for 50 projects.

[44] Details are set forth in the Guidelines for the Selection Process of Renewable Energy Projects under Feed-In Tariff System and the Award of Certificate for Feed-In Tariff Eligibility.