MALAMPAYA GAS FIELD — PHILSTAR FILE PHOTO

THE Philippine Senate on Tuesday night approved on second reading a bill that seeks to promote the production of indigenous natural gas and liquefied natural gas, which the government sees as a transition fuel toward renewable energy.

Under Senate Bill No. 2793 or the proposed Philippine Natural Gas Industry Development Act, the Department of Energy will oversee strategies to develop the downstream natural gas industry.

The Philippines is hard-pressed to find other sources of indigenous energy as the Malampaya gas field, which supplies a fifth of the country’s power requirements, nears depletion. The gas field is expected to run out of easily recoverable gas by 2027.

The Philippines plans to raise the share of renewable energy in the country’s energy mix to 35% by 2030 and to 50% by 2040 from 22% now.

Under the bill, the Energy Regulatory Commission (ERC) will keep track of the government’s share and other revenues related to the production of indigenous natural gas sold to power plants.

LNG storage and regasification terminals will not be considered as a public utility operation under the measure.

Downstream natural gas industry projects, as certified by the Department of Energy, will also be entitled to a value added tax (VAT) exemption in the purchase and sale of indigenous gas attributed to aggregated fuel as authorized by the ERC.

Facilities used for the production of downstream natural gas are also entitled to zero-rated VAT for the local supply of goods and services needed for their operations. — John Victor D. Ordonez