The Department of Trade and Industry, as steward of corporate sustainable governance, encourages companies to demonstrate their adoption of adequate environmental protection systems and sustainability strategies.
Businesses are part of the growth cycle of the economy and their footprints leave indelible marks which can either be good or bad, according to Trade Secretary Alfredo Pascual.
“Sustainability is a criterion in determining priority activities for inclusion in DTI’s Strategic Investment Priority Plan under the CREATE Act [Republic Act 11534]. Qualified projects listed in the SIPP are entitled to tax incentives. Through these incentives, DTI encourages investments in businesses involving processes and innovations that will lead to the attainment of sustainable development goals,” he said.
Pillar of industrialization
The DTI underscores the vital role of the energy sector as a driver of industrialization and economic growth.
The investment promotion agencies monitor registered enterprises’ compliance with environmental laws as a requirement for the grant of incentives. For instance, energy-related projects should utilize energy sources adopting environment-friendly technologies that comply with the Clean Air Act, the Environmental Impact System law, the Biofuels Act, where applicable, and other relevant environmental laws and regulations.
The DTI supports the transition to renewable energy, increasing renewable energy’s share to 50 percent of the total energy supply by 2040, as stated in the Philippine Energy Plan for 2020 to 2040.
Under the Renewable Energy Act, foreigners can own up to 100 percent of renewable energy projects in solar, wind and tidal energy, as recently clarified by the legal opinion of the Department of Justice.
The government lifted foreign ownership restrictions on RE generation projects in December 2022, which led to a significant increase in interest among investors.
Investors are looking at solar and wind projects as well as manufacturing of equipment such as wind turbine generator towers, foundations, blades and other wind turbine parts.
President Ferdinand Marcos Jr., Trade Secretary Pascual and Energy Secretary Raphael Lotilla held a roundtable meeting on renewable energy in Beijing, China on Jan. 5, 2023 to drum up support for RE projects in the Philippines.
Pascual underscored the importance of the RE sector in achieving economic development. “The energy sector is a vital driver of Philippine industrialization and economic growth. For industries to flourish in our country, we need a secure, resilient and competitive supply of energy. In the face of climate change and the worldwide shift to green development, the Philippine government finds renewable energy to be a long-term solution to our sustainable development,” he said.
The DTI chief said the Philippines now has a healthy and competitive business environment that would enable RE companies to thrive.
“Investors will find that the Philippines, with its geographical advantage, is home to abundant sources of renewable energy. On the policy front, investors will find it relevant that in our existing Renewable Energy Act, foreigners can own up to 100 percent of renewable energy projects in solar, wind and tidal energy. This should help the Philippines increase renewable energy’s share to 50 percent of its total energy supply by 2040,” he said.
Chinese RE companies responded positively towards the Philippines’ policy directions and conveyed interest to invest and help the country realize its National Renewable Energy Program 2020-2040 goals.
Pascual said that as issues involving climate change become even more pressing, investments in the RE sector would help the Philippines navigate the path towards a more sustainable business ecosystem. The sector also creates employment opportunities up and down the supply chain.
He said about $13.76 billion worth of investments in the RE sector are now in varying stages in the investment pipeline.
Danish renewable energy developer Copenhagen Energy A/S’, for one, is investing P360 billion for the BuhaWind offshore wind project in Ilocos Norte.
“I am looking forward to the implementation of this project, especially since CE has already secured a service contract. They also already submitted a system impact study, which already included the electrical design and proposals on how to bring power to the grid,” Pascual said.
He said the Board of Investments is in close coordination with other government agencies involved to expedite the evaluation of the study. The project is expected to be in commercial operation by 2028.
The project involves the development of offshore wind power using wind turbine generators that can produce 15 to 20-megawatt capacity each in the waters off Burgos, Bangui and Pagudpud towns in Ilocos Norte.
CE chief executive Jasmin Bejdic said the company was on track and progressing with community engagement, financial impact assessment and national strategy.
“With proper government support, we will be able to implement the project according to plan, noting Ilocos region as definitely one of the best resource for wind power,” he said.
Bejdic said the Philippines remains a very promising business destination for floating wind towers.
The BOI is also evaluating some P446 billion worth of investments in eight RE projects and a P225-billion pump-storage and solar energy project.
“We highly regard renewable energy projects, especially off-shore wind types, as game changers especially as more and more investors particularly in global value chains are looking for locations that provide solutions on net-zero carbon commitments of companies,” Pascual said.
He said the BOI is also engaged with the World Bank on the implementation of its recommendations on the Offshore Wind Study conducted in 2022. The WB ranked the Philippines as the 8th best location globally for offshore wind.
Pascual expects more investments in the renewable energy sector in 2023, as many companies beging the transition to cleaner power sources.