=== pep-2023-2050-vol3-section-e2-page-065.pdf === The U.S. likewise shared its work towards securing investments for Pillar III to include mobilization of private capital by deploying blended finance, convening investors, and building project pipelines. Finally, the meeting also highlighted the support for research, knowledge exchange, and skills development by expanding access to digital tools, workforce training, and academic partnerships. In May 2022, the Philippines joined the Indo-Pacific Economic Framework (IPEF) with Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Singapore, Thailand, United States, and Viet Nam. Finally, the Philippines proposed a cooperative work program on Mainstreaming Green Jobs for a Just Energy Transition. The Proposal aims to conduct initiatives that will support workers in the transition to a clean economy. C. Trade-Related Agreements/Economic Partnerships The DOE participates in various inter-agency trade-related activities and undertakings, such as the Committee for ASEAN Economic Community of the ASEAN Matters Technical Board (AMTB) and the Technical Board on APEC Matters (both under the Philippine Council for Regional Cooperation), the Committee on Trade in Goods and the Philippine Working Group on Services led by the Department of Trade and Industry (DTI), and the Inter-Agency Committee on Trade in Services spearheaded by the National Economic and Development Authority (NEDA). The DOE is still actively engaged in free trade areas/regional trade areas such as the World Trade Organization (WTO), ASEAN Free Trade Area (AFTA), and Regional Comprehensive Economic Partnership (RCEP) Agreement, among others. Below are the recent updates on trade-related initiatives: 1. WTO Passage of Executive Order (EO) 10. On 29 December 2022, an Executive Order was signed extending the temporary modification of rates of import duty on meat of swine, maize (corn), and coal specified in EO 171, s. 2022. Said extension is aimed at maintaining affordable prices for these commodities to ensure food and energy security, reduce the cost of electricity, and diversify the country’s market sources. The temporary modification shall take effect until 31 December 2023, except for coal which shall be applied zero duty, subject to semestral review after 31 December 2023. Passage of Executive Order 12. On 13 January 2023, the EO temporarily modifies the rates of import duty on electric vehicles (EVs), parts, and components was signed to boost growing EV industry in the country and support the transition to other emerging clean energy technologies. Through this EO, the government hopes to encourage consumers to consider EVs as a cleaner and greener transportation option. Vo l u m e 3 58 === pep-2023-2050-vol3-section-e2-page-066.pdf === The EO shall be subject to review after one year from its implementation and shall be in full effect for a period of five (5) years. Meanwhile, the Tariff Commission (TC) conducted a consultation last 01 June 2023 regarding the Comprehensive Review of the Most Favored Nation (MFN) Tariff Schedule to set the MFN tariff rates for 2024 to 2028, pursuant to Section 1603 (b) of Republic Act (RA) 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA). The DOE submitted a position paper on products being requested for tariff modification and tariff lines proposed for merging. 2. RCEP Following the signing of the RCEP in 2020, the Philippines became the latest country to ratify the said Agreement through Senate Resolution 485 issued on 22 February 2023. The RCEP Agreement is reflective of the country’s offensive interest to progressively liberalize trade and create a competitive investment environment in the region, including the energy sector. 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. Energy-related trade in services would further improve the business climate of the energy sector in the country, supportive of the DOE’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 (0%) tariff rates on energy goods covered under Chapter 27 of the Tariff Book published by the TC. This is preserved in the RCEP Agreement as a reaffirmation of the continued cooperation on energy trade in the region. The tariff elimination is important to ensure an unhampered supply of commodities, considering the reduced production from the Malampaya reserves. The zero percent tariff rate is also applicable to LNG, especially that the Philippines considers this as a transition fuel for power plant supporting variable RE, which will come into play this year in the country. Above all, the DOE is one with the government in assuring the public that the RCEP Agreement will not adversely impact the country’s energy supply chain. At the very least, it will further boost and encourage trade and investments in the country towards affordable, reliable, resilient, secure, clean, sustainable, climate-centered, and accessible energy. Following this development, EO 25 was signed on 07 May 2023 on the implementation of the PhilippineSchedule of Tariff Commitments, as well as the modification of rates of import duty on certain imported articles under RCEP. 3. ASEAN-United Kingdom (UK) Dialogue Partnership The ASEAN-UK Dialogue Partnership was formalized in August 2022, the first new ASEAN Dialogue agreed in 25 years. The ASEAN and UK’s shared principles and priorities regarding partnership covering the areas of trade, investment, climate change and the environment, security, science and technology, and education will lead to enhanced economic collaboration and closed ties between the two sides. 4. ASEAN-Canada Free-Trade Agreement (ACAFTA) The ACAFTA was launched on 17 November 2021, which reaffirmed the growing relationship between ASEAN and Canada and the latter’s commitment to trade and economic engagement in the region. One of the major provisions to be negotiated is the proposed Environment Chapter, which aims to ensure that environmental protection is upheld as trade and investment are liberalized. The attempt to include an Environmental Chapter in an ASEAN+1 FTA is the first of its kind, and the DOE has committed to be part of the Philippine negotiating team to ensure that the energy agenda is pursued in this realm. 59 Philippine Energy Plan === pep-2023-2050-vol3-section-e2-page-067.pdf === D. Bilateral Energy Cooperation The DOE is involved in bilateral negotiation and consultation mechanisms headed by the DTI, NEDA, and the Department of Foreign Affairs (DFA). Some of the few consultations/mechanisms are the Philippines-US Bilateral Strategic Dialogue; Philippines-Switzerland Joint Economic Commission; Philippines-Russia Political Consultations; Philippines-France Joint Economic Commission; Philippines-Japan High Level Joint Committee on Infrastructure Development and Economic Cooperation; Philippines-Hungary Joint Commission on Economic Cooperation; Philippines-India Joint Commission on Bilateral Cooperation; Philippines-Canada Joint Economic Commission; Philippines-Morocco Energy Cooperation; and Philippines-Korea Policy Consultations. Specific to bilateral cooperation on energy, below are some of the recent cooperation initiatives of the Philippines with other countries: 1. Philippines-United States (PH-US) On the sidelines of CERAWeek 2022 in Houston, Texas, the Philippines and the U.S. signed two documents, namely the MOU Concerning Strategic Civil Nuclear Cooperation or the NCMOU, and the Clean Energy Demand Initiative (CEDI) Letter of Intent (LOI). The NCMOU serves as a non-legally binding document that highlights both countries’ mutual interest in working together and developing solutions on their respective nuclear energy needs consistent with their shared security interests. On the other hand, CEDI aims to bring corporations and countries together to promote investments and rapidly deploy clean energy. 2. Philippines-France (PH-FR) The Philippines and France welcomed the signing of the MOU between Hydrogène de France (HDF) and the National Power Corporation (NPC) and the Mindanao Development Authority (MinDa) on 20 June 2023 to facilitate the development of RE and hydrogen projects in Small Power Utilities Group (SPUG) Areas and in Mindanao. Both countries also agreed to strengthen bilateral cooperation in areas of infrastructure and transportation, aeronautics, agriculture, electronics, maritime industry, and shipbuilding. 3. Philippines-Hungary (PH-HU) An MOU was signed in 2021 to strengthen cooperation in the field of higher education, particularly in the nuclear field and in diplomatic training. It will also facilitate the setting up of long-term cooperation in the nuclear field between the two countries, making accessible high-quality nuclear education and professional training for Filipinos. Further, the agreement on diplomatic training will encourage the participation of diplomats, and the members of the Philippine Nuclear Energy Program Inter-Agency Committee (NEP-IAC) in each other’s training, as well as the exchange of academics, speakers, and experts. Currently, both sides have already nominated the respective Administrators for the implementation of the said MOU. 4. Philippines-India (PH-IN) The draft MOU between the DOE and the Ministry of New and Renewable (MNRE) of India in the field of renewable energy is still being finalized by the Parties. Vo l u m e 3 60 === pep-2023-2050-vol3-section-e2-page-068.pdf === The purpose of the MOU is to establish the basis for a cooperative institutional relationship to encourage and promote bilateral technical cooperation on RE based on mutual benefit, equality, and reciprocity between the Parties. The areas of cooperation will focus on the development of RE in the following areas: • • • • • Solar Energy Wind Energy Biomass/ Bioenergy/ Waste to energy Small Hydro Storage and Capacity Building 5. Philippines-Indonesia (PH-ID) During the 7th Senior Officials’ Meeting of the Philippine-Indonesia Joint Commission for Bilateral Cooperation (JCBC) held on 11-12 April 2022, the DOE proposed to pursue a new bilateral agreement focusing on wider areas of cooperation across the spectrum of energy. Said draft MOU between the DOE and the Ministry of Energy, Minerals, and Resources (MEMR) of Indonesia on Cooperation in the Field of Energy intends to replace the expired MOU on the Cooperation on Long-Term Coal, Oil, and Gas Supply and Geothermal Energy Development. Collaboration under this new MOU may include, but is not limited to the following: a) minerals and coal, and clean coal technology; b) oil and gas, covering upstream and downstream development, LNG, international standards, and Health-Safety-Security-Environment (HSSE) best practices for project siting, design, construction, expansion, rehabilitation, modification, operation, and maintenance of energy projects/facilities; c) energy transition; d) renewable energy; e) energy efficiency and demand-side management; f) electric vehicles and alternative fuels; and, i) geological-related risk mitigation. 6. Philippines-Saudi Arabia (PH-KSA) The Philippines and the Kingdom of Saudi Arabia (PH-KSA) have ongoing discussions on the proposed MOU between the DOE and the Ministry of Energy, Industry, and Mineral Resources of KSA, specific to the oil and gas sector. The proposed cooperation will promote and strengthen collaboration in the oil and gas sector through: • • • • Exchange of information and analysis regarding world petroleum markets and ways to achieve stability; Exchange visits and holding meetings between representatives of the petroleum industry from both countries; Technical cooperation between their respective firms and companies in the execution of joint projects in the petroleum sector; and Cooperation in activating the dialogue between petroleum-producing countries in various aspects and the upgrading of its instruments including the International Energy Forum (IEF) to stabilize energy markets and achieve prosperity. 7. Philippines-Qatar (PH-QA) An ongoing discussion between the Philippines and the Government of the State of Qatar on the formulation of an MOU on Energy Cooperation. Apart from the promotion, development, and strengthening of energy cooperation between the two countries, the MOU is intended to provide mutual benefit to the parties by enhancing and stimulating their respective economic, industrial, and social development. The initial proposed areas of cooperation under this are: • • • • • Oil, gas, and related products, and services including LNG; Power generation, transmission, and distribution; Renewable Energy; Energy Efficiency and Conservation; and, Alternative Fuels and emerging technologies. The cooperation framework and activities will be implemented through: • • • • 61 Bilateral Consultations; Sharing of knowledge, experience, and their practical applications; Exchange of information and statistical data available in open sources regularly; and Any other form of cooperation as agreed upon by the parties. Philippine Energy Plan === pep-2023-2050-vol3-section-e2-page-069.pdf === 8. Philippines-United Arab Emirates (PH-UAE) The Philippines and the United Arab Emirates (UAE) are currently discussing an Energy Transition Cooperation through an MOU. Similarly, both countries will endeavor to cooperate on the following: a) RE, b) LNG as a transition fuel, c) energy efficiency and conservation, and d) alternative fuels and emerging technologies, among others. E. Collaboration with International Organizations (IOs) and Development Partners (DPs) The DOE remains steadfast in strengthening its collaboration with international organizations and other countries to provide the necessary assistance in achieving the country’s energy transition targets. 1. Foreign-Assisted Projects (FAPs) Development for Renewable Energy Applications Mainstreaming and Market Sustainability (DREAMS). The DOE has been collaborating with the Global Environment Facility (GEF) and the United Nations Development Program (UNDP) to carry out the DREAMS Project from 2016 to 2023. The project was granted USD5.2 million to support its initiatives. The primary objective of the DREAMS project is to reduce GHG emissions by promoting and commercializing the RE market, while also addressing barriers to investments in RE-based power generation projects. The project has four main components. Through various initiatives under each component, the project significantly contributed to enhancing the RE landscape in the Philippines and therefore achieved its objectives, to wit: Supportive RE Policy Environment The DREAMS project facilitated the development and approval of the National Renewable Energy Program (NREP) for the period 2020-2040. Through technical expertise and stakeholder engagement, the project contributed to the establishment of a favorable policy framework conducive to RE growth and expansion. Local Institutional Strengthening Focused on specific provinces, namely Iloilo, Palawan, and Lanao del Sur, this component aimed to build capacity for local RE planning. By empowering local governments and electric cooperatives (ECs) with knowledge and resources, the project facilitated informed decision-making and integration of RE policies into local plans. Capitalized RE Market The project played a pivotal role in the establishment of the Renewable Energy Registrar (RER) platform, operationalized in 2019. This platform facilitates efficient trading and transactions of RE certificates to increase the RE share in the country’s power capacity mix. RE Commercialization Through the Support Facility for RE (SF4RE), the project funded the installation of 18 local RE projects, showcasing the viability of RE and fostering cooperation among communities, local governments, and ECs. This initiative significantly boosted confidence in RE viability and promoted its widespread adoption. The DREAMS project made substantial contributions to the promotion and development of RE in the country. By fostering a supportive policy environment, strengthening local institutions, capitalizing the RE market, and promoting RE commercialization, the project has left a lasting impact on the country's efforts to reduce GHG emissions and promote sustainable energy practices. Moving forward, it is imperative to build upon the achievements of the project and continue advancing towards a greener and more sustainable energy future. While the project concluded its implementation on 31 July 2023, operational and financial closure were completed on 31 December 2023. The final accomplishment report was approved on 28 June 2023 by the DREAMS Project Steering Committee chaired by the DOE, aims to leave a significant impact on the promotion and development of RE in the country. Vo l u m e 3 62 === pep-2023-2050-vol3-section-e2-page-070.pdf === Energy Secure Philippines (ESP). The ESP project, launched on 28 June 2021, is a collaborative effort between the Philippine government and the U.S. government through the U.S. Agency for International Development (USAID). The project’s primary objective is to foster inclusive economic growth and strengthen resilience of the energy sector by attracting private investment and deployment of advanced technologies. To achieve this goal, ESP aims to mobilize USD750 million to catalyze private sector investment in renewables in the country. The project also offers a grant program amounting to USD7.5 million, encouraging collaboration between the private sector and local non-governmental entities to undertake complementary energy projects. The ESP provides technical support to national and sub-national policy mechanisms and regulatory frameworks, assisting in policy development, and public consultations. Special attention is given to prompting women's participation, with attendance data disaggregated by gender and actively monitored and reported. The project operates through the Grants Under Contract (GUC) Mechanism, accepting proposals from private entities, academia, and civil organizations for policy and technical studies, innovative technologies, and other relevant areas. The grants cover the following sectors: fishery and agroprocessing, logistics, energy efficiency, and the development of regional knowledge hubs. Gender considerations are integrated into project design and implementation. Under the GUCs, the ESP facilitates the provision of goods, services, and diverse RE facilities to grantees in specific local government units (LGUs). The goal is to enhance resilience and address women's issues in the energy sector. Examples of projects include the establishment of solar-powered boats and sustainable food facilities. Capacity building activities are significant components of the project, with an emphasis on increasing the knowledge and skills of national government and LGU partners. Particular attention is given to enhancing women's capacity in technical energy fields, further promoting gender equality and inclusion in the energy sector. The ESP has been a key partner of the DOE in advancing an energy and climate-resilient sector. The project has made substantial contributions to making the energy sector more resilient through the implementation of the following: 1. Formulation of Department Circular (DC) 2022-06-0028, a supplemental policy on Energy Resiliency Planning and Programming, including enhancing the Resiliency Compliance Plan (RCP) required to be submitted by energy companies; 2. Evaluation of the submitted RCPs of energy companies 3. Development of an Energy Resilience Scorecard (ERS) for RCPs’ assessment, an ongoing initiative; 4. Promotion of energy resiliency through the conduct of an Energy Resiliency Forum; 5. Conduct of various capacity-building activities and simulation exercises on energy resiliency; 6. Development of the Cybersecurity Program for the energy sector spanning (2023 to 2025); 7. Establishment of a DOE Command Center/Energy Sector Emergency Operations Center (ESEOC) in 2024; and, 8. Building a solar PV-based Mobile Energy System (MES) for deployment to critical infrastructures in 2024. Through these initiatives, the ESP has not only catalyzed private investment in RE but also fostered inclusive and sustainable development that prioritizes the needs and interests of local communities, contributing to the overall resilience and stability of the Philippine energy sector. Clean Energy Finance and Investment Mobilization (CEFIM). In partnership with the Organization for Economic Co-operation and Development (OECD), the CEFIM program launched on 13 December 2021, aims to expedite finance and investment for clean energy in the Philippines. Its primary objective is to unlock financial resources and attract 63 Philippine Energy Plan === pep-2023-2050-vol3-section-e2-page-071.pdf === investments to support the country in achieving its clean energy targets and sustainable finance goals. An essential component of the program is the creation of the Clean Energy Finance and Investment Roadmap, which brings together key stakeholders from both the government and private sectors to address barriers to investment and financing of clean energy sources and technologies. Through this roadmap, the program aims to facilitate effective financing solutions, attract investors, and contribute to the country’s clean energy transition, thereby aligning with the PEP. The DOE and OECD organized two workshops - the first workshop took place from 30 May to 1 June 2022, and the second on 24-25 November 2022. These workshops were designed to mobilize funding and generate investment interest, supporting the country's clean energy targets and contributing to the development of the roadmap. Moreover, the CEFIM program prioritizes implementation support, investor dialogues, and collaboration with ASEAN countries. Its key focus areas include scaling up finance and investment for renewable energy, energy efficiency measures, and the deployment of EVs. The program will also enhance stakeholders' capacity and knowledge through resources such as the Clean Energy Finance and Investment Database and the Clean Energy Finance Training Program. These resources will provide valuable insights into funding trends, financial market expectations, and the development of viable clean energy projects. 2. Energy Transition Engagements Energy Transition Council (ETC). The ETC’s overall purpose is to enable an effective dialogue between countries that require support for their energy transition on one hand, and the major international actors offering support on the other hand, to find, coordinate, and implement tailored solutions in a range of areas, including integrated energy planning, green grids, and energy efficiency, more rapidly. The ETC partner countries are being connected through dialogues at senior and working levels, and regional discussions on common issues of developing countries to accelerate their energy transition in the context of a green recovery. Progress is being reported at Ministerial meetings every three to four months. The ETC’s Rapid Response Facility (RRF) has been established, allowing for a group of existing programs and some additional resources to respond rapidly to the requests for technical, commercial, regulatory, and policy assistance arising from political dialogues that cannot be met directly by in-country ETC partners. Since March 2021, the RRF has responded to 24 requests on a wide range of policy areas. The ETC partners have committed almost £10 million (British Pound) of aligned funds for energy transition support through the RRF, including for energy efficiency, grid infrastructure, and energy planning. To drive the rapid transformational change required in the power sector, the ETC also works with its partner countries to help them access longer-term support and larger amounts of finance through a major international energy transition program. The ETC partners have worked together to prioritize the mobilization of their contributions to these programs as the most effective way of simplifying the landscape of financial and technical support available for developing countries. The RRF serves as a bridge to countries accessing these larger programs, as well as providing direct assistance. Southeast Asia Energy Transition Partnership (ETP). The ETP Program was launched at the 2020 ASEAN Energy Business Forum (AEBF) in November 2020 on the sidelines of the 38th ASEAN Ministers on Energy Meeting (AMEM38) and Associated Meetings. ETP also participates in UK’s ETC. Through a USD 50 million Trust Fund managed by the United Nations Office for Project Services (UNOPS) over a fiveyear program, the ETP aims to bring together governments and philanthropies to work with partner countries in the region to accelerate the energy transition by financing technical cooperation activities to support such towards modern energy systems that can simultaneously ensure economic growth, energy security, and environmental sustainability. Enabling the transition toward greener energy systems will greatly contribute to the achievement of the UN’s Sustainable Development Goals (SDGs) and the Paris Climate Agreement objectives. Vo l u m e 3 64 === pep-2023-2050-vol3-section-e2-page-072.pdf === The ETP focuses on selected Southeast Asian countries including the Philippines. The ETP provides highlevel technical advisory support, holistic support to governments on financing and technical needs, capacity and skill development, and facilitation of dialogues in all related areas. The donors and partners include philanthropies (i.e., Children's Investment Fund Foundation or CIFF, the Ikea Foundation) and government entities (from England, France, Germany, and Canada). The program represents a platform for both types of donors and partners to properly coordinate their efforts in these areas. Just Energy Transition (JET). A multistakeholder consultation was conducted by the UNDP and DOE on 24 October 2022 to discuss policy options and ways forward to reconcile the need for affordable and reliable power to support the country’s development goals, while enabling it to meet its Nationally Determined Contribution (NDC) commitment, by way of a socially just transition of the country´s energy sector. The consultation supports a process that involves all stakeholders to establish strong institutional frameworks that address the social and economic impacts of the energy transition. It is hoped that with the leadership of the DOE and the support of various stakeholders within and outside the government, this consultation will provide a starting point for pro-active discussions and learning process on a reform agenda to allow government, policy makers, academics, private sector, and civil society to work together toward low carbon development in the country. Energy Transition Mechanism (ETM). In October 2021, the Philippines was selected to develop an Investment Plan (IP) for Accelerating Coal Transition (ACT) Program under the Climate Investment Funds (CIF) of the Asian Development Bank (ADB). The main objective of the ACT is to tackle key barriers related to governance, people and infrastructure, address funding gaps leading to the successful implementation of country-level strategies and associated kick-start projects; build support at the local and regional levels; and accelerate the retirement of existing coal assets (coal mines and coal power plants) together with enabling new economic activities for those to be affected by the transition. The ACT looks at supporting both public and private entities with the relevant toolkit necessary to effect the transition. The ACT supports interventions including “soft” investments for government and people, and physical investments in infrastructure. Eligible infrastructure investments include mine closure, plant decommissioning, reclamation and repurposing, repowering with renewable and storage, ancillary services, energy efficiency, and biodiversity. Two Multilateral Development Banks (MDB) Missions were conducted in partnership with the DOF and DOE in August 2022 and March 2023, purposely to plan the preparation of the IP for access to the CIF ACT window concessional funding. As an update, the CIF for Clean Technology Fund (CTF) - Trust Fund Committee is currently reviewing the proposal for a 6-month extension on the submission of the country’s IP with focus on repurposing of coal power plants. 65 Philippine Energy Plan