THE Department of Energy (DOE) welcomed the endorsement by the National Economic and Development Authority (NEDA) Board headed by President Ferdinand Marcos, Jr., the executive order implementing the tariff commitments under the Regional Comprehensive Economic Partnership (RCEP) Agreement.
In a statement, Energy Secretary Raphael Lotilla expressed belief that the RCEP 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.
According to Lotilla, it 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.
The energy chief added that energy-related trade in services would further improve the business climate of the energy sector in the country, supportive of the Department’s aggressive push for the exploration, development, and utilization of the country’s indigenous energy resources as we are transitioning to a low-carbon future.
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 (TC).
This is preserved in the RCEP Agreement as a reaffirmation of the continued cooperation on energy trade in the region.
Lotilla said that the tariff elimination is important to ensure an unhampered supply of commodities, considering the reduced production from the Malampaya reserves.
The zero percent tariff rates are also applicable to liquefied natural gas (LNG), specially that the Philippines considers this as a transition fuel for power plants supporting variable renewable energy will come into play this year in the country.
He also added that RCEP would not therefore cause any adverse impact on imported energy goods such as oil and gas.
In addition, the zero percent tariff rates on coal products were extended to Most-Favored Nation (MFN) countries in light of the Russia-Ukraine crisis, which affected the global economic situation and the steady supply of commodities in the world.
In evaluating international agreements affecting the Philippine energy sector, the DOE considers investments, energy security, and access to technologies.
Lotilla also stressed that the energy sector is a capital-intensive undertaking where Filipino capital may not be sufficient. Second, developed countries of RCEP Partner Countries have advanced technological capabilities. Services by these countries in the Philippines could enhance technology transfer to local counterpart companies and DOE.
Third, 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 towards ensuring the country has enough energy supply to power Filipino households and communities.
Catherine R. Cueto