DC2022-11-0034 (RE Act IRR §19 Nationality Amendment)
Document: Department Circular No. DC2022-11-0034 Title: Prescribing Amendments to Section 19 of Department Circular No. DC2009-05-0008 (RE Act IRR) on Nationality Restrictions Issued: November 14, 2022 Issuing authority: DOE Secretary Raphael P.M. Lotilla Pages: 2 (image-based PDF; OCR via tesseract)
What This Document Does
Removes the 60% Filipino ownership requirement for the exploration, development, and utilization of solar, wind, hydropower, and ocean energy resources, opening these sectors to 100% foreign equity. Geothermal resources are explicitly excluded and remain subject to constitutional nationality restrictions.
Legal Basis
The DOJ issued an Opinion (addressed to DOE Secretary Lotilla, 29 September 2022) concluding that solar, wind, hydro, and ocean energy resources are:
- Inexhaustible — therefore not “natural resources” within the meaning of Article XII, Section 2 of the Philippine Constitution, which reserves natural resource exploration/development to Filipinos; and
- Not covered by the constitutional restriction on water appropriation from natural sources.
The RE Act itself contains no nationality restriction provision. The 60% Filipino ownership requirement existed solely in §19, Rule 6 of the RE Act IRR (DC2009-05-0008), which had imposed it administratively.
Key Provisions
Section 1. Deletes the text of §19(A) of the RE Act IRR (the 60% Filipino ownership requirement) and replaces it with “[deleted].”
Section 2. Amends §19(B) to allow the State to enter into RE Service or Operating Contracts with “Filipino and/or foreign citizens or Filipino and/or foreign-owned corporations or associations.”
Section 4. Also repeals §§3.19, 4.2.1, and 4.2.3 of DC2019-10-0013 (the Omnibus RE Guidelines then in force), which had carried the nationality restriction into the RE contract award framework.
Activities remaining reserved for Filipinos (footnote 5):
- Water appropriation from natural sources (PD 1067; IDEALS v. PSALM, GR 192088)
- Geothermal resources exploration, development, and utilization (Article XII §2; except for large-scale FTAAs)
- Timber/forest products on public domain lands
Policy Significance
One of the most consequential regulatory liberalization measures in the Philippine RE sector. By removing the foreign equity cap for solar, wind, hydro, and ocean energy, the DOE opened these sectors to 100% foreign ownership — addressing a major constraint on RE project financing. The circular preceded and enabled the broader liberalization under the 2022 Public Service Act amendment (RA 11659), which reclassified generation as a non-public-utility activity.
Pages Created
Full text: Cleaned copy