RCEP to boost Philippines energy sector, says DOE

MANILA, Philippines — The Department of Energy (DOE) expects the Regional Comprehensive Economic Partnership (RCEP) agreement to be a major boost for the country’s energy sector.

Energy Secretary Raphael Lotilla said the RCEP provides opportunities for expanded market access and establishes clear, stable and predictable rules on trade in energy goods and services, including investments among participating countries.

He said the agreement is reflective of the country’s “offensive interest to progressively liberalize trade and create a competitive investment environment in the region for the energy sector.”

Further, Lotilla said energy-related trade in services is expected to further improve the business climate of the country’s energy sector, which is in line with the DOE’s push for the exploration, development and utilization of the country’s indigenous energy resources.

The DOE has expressed its support for the implementation of the RCEP agreement, welcoming the endorsement by the National Economic and Development Authority of the executive order implementing the tariff commitments under the agreement.

RCEP is set to enter into force on June 2, or 60 days from the country’s deposit of the instrument of ratification to the ASEAN Secretary General on April 3.

“The DOE is one with the Philippine government in assuring the public that the RCEP agreement will not adversely impact the country’s energy supply chain,” the agency said.

“At the very least, it will further boost and encourage trade and investments in the country toward affordable, reliable, resilient, secure, clean, sustainable, climate-centered, and accessible energy,” it said.

Lotilla said the energy sector is a capital-intensive undertaking wherein Filipino capital may not be sufficient.

He said developed states among the RCEP partner countries have advanced technological capabilities, and their services in the Philippines could enhance technology transfer to local counterpart companies and the DOE.

In addition, the energy chief said international energy cooperation is vital in pursuing collaborative activities with other countries to achieve greater energy self-sufficiency, security and sustainability.

“These efforts are geared toward ensuring the country has enough energy supply to power Filipino households and communities. The DOE remains at the forefront in supporting President Marcos on this undertaking,” the agency said.

Meanwhile, the DOE said that even before the country acceded to RCEP, the ASEAN and ASEAN+1 Free Trade Partners already enjoyed zero percent tariff rates on energy goods covered under Chapter 27 of the Tariff Book published by the Tariff Commission.

This is preserved in the RCEP agreement as a reaffirmation of the continued cooperation on energy trade in the region.

According to the agency, the tariff elimination is important to ensure an unhampered supply of commodities.

The DOE said the zero percent tariff rates are also applicable to liquefied natural gas, which the country considers as a transition fuel for power plants supporting variable renewable energy.

Lotilla said the RCEP would not, therefore, cause any adverse impact on imported energy goods such as oil and gas.

Further, the DOE said the zero percent tariff rates on coal products were also extended to most-favored-nation countries in light of the Russia-Ukraine crisis.