NEWS

By John Victor D. Ordoñez | Business World | February 5, 2024, 8:38PM

COLLABORATION with the US in mineral processing and energy security projects will likely reduce the Philippines’ dependence on exporting various ores to China, analysts said.

(Photo: REUTERS)

“There are political considerations for this new move by the US,” Minimal Government Thinkers founder Bienvenido S. Oplas, Jr. said in a Viber message.

“It would reduce Philippine dependence on China ore exports and in the process pivot the Philippines away from China.”

Washington is interested in partnering to set up projects to boost the Philippines’ processing of nickel, cobalt and copper, State Department Undersecretary for Economic Growth, Energy, and Environment Jose W. Fernandez said at a briefing during his visit to Manila last week.

According to research group Observatory of Economic Complexity, the Philippines exported about $1.4 billion (P78.63 billion) in nickel ore to China in 2021, making it the top export destination for the mineral that year.

Mr. Fernandez has said that high energy costs are keeping miners and semiconductor companies from investing in the Philippines. He added that the Philippines must incentivize potential operators of wind and solar energy projects to attract more foreign investment in critical minerals.

The Philippines has potential offshore wind resources of 178 gigawatts, with large parts of the coast windy enough to power turbines, the Board of Investments has said.

Manila and Washington on Nov. 17 signed a deal that would allow Washington to export nuclear technology to Manila to help it develop civilian nuclear energy infrastructure.

That same month, the State Department said it will collaborate with the Philippines in exploring the expansion of the semiconductor industry in the context of the CHIPS Act of 2022, a US law that seeks to build US capability in developing and manufacturing semiconductors after years of offshoring these functions.

“The Philippines can reduce its energy costs via the early adoption of nuclear energy including the expansion of coal brownfield investment now that coal greenfield is banned,” Mr. Oplas said.

The House of Representatives had approved a bill seeking to establish an agency that would regulate the nascent nuclear industry.

The Malampaya gas field, the country’s only indigenous commercial source of natural gas, is expected to run out of easily recoverable gas using current techniques by 2027. The gas field accounts for about 20% of Luzon’s electricity requirements.

The government is aiming to raise renewable energy’s (RE) contribution to the energy mix to 35% by 2030 and to 50% by 2040. RE currently accounts for 22% of the energy mix.

As of October, the DoE has awarded at least 1,300 RE contracts with a total potential capacity of 130,880.8 megawatts.

“Broader economic relations and investments should be a pillar of the repivoting of the Philippines to the US,” Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said in a messenger chat.

“The US can explore energy and mining investments in the Philippines, given the high cost of capital in these sectors, and the limitation of domestic capital to fund these endeavors.”

Source: Business World