THE Congressional Policy and Budget Research Department (CPBRD) of the House of Representatives said protectionism and rigid regulations are causing bottlenecks in the bioethanol industry.
In a policy brief, the think tank found a “policy mismatch” between the objectives of the Biofuels Act of 2006 and the way it is currently being implemented by government agencies.
The House recently passed the Oil Price Stabilization Act, which explicitly allows the President to suspend mandatory biofuel blending for up to one year if the cost of blended fuel exceeds pure gasoline by at least 5%.
Instead of achieving the goal of energy independence and rural development, the report said the country remains dependent on imported ethanol to meet the mandatory 10% biofuel blend for gasoline.
It said suspending the mandate would severely threaten the livelihoods of 84,000 to 88,000 sugarcane farmers, 80% to 85% of whom are vulnerable smallholders.
It said domestic production has significantly underperformed its target of 944.15 million liters of bioethanol by 2025 set out in the Philippine Energy Plan, with only 424.6 million liters actually produced by domestic refiners in 2024, causing oil companies to rely on imports.
The CPBRD said only 22 bioethanol refineries were operational as of 2025, forcing them to operate at an unsustainable 98.5% maximum capacity just to satisfy half of the domestic demand.
According to the CPBRD, policies adopted by the Sugar Regulatory Administration and the Department of Agriculture are further aggravating the situation.
These include restrictions on importing sugar and molasses, as well as a moratorium on the construction of new ethanol plants. As a result, local ethanol is reportedly 1.7 to 3.8 times more costly than imports. — Pexcel Jon Bacon
