Trade and Industry Secretary Alfredo E. Pascual said Philippines and Norway need to harness economic relations beyond the maritime sector as he urged Norwegian firms to find other investment opportunities in the Philippines' bid to improve its participation in the global value chains (GVCs).

Pascual spoke at the recent Norway-Philippines Energy Conference “Creating Currents Together” in Manila where he discussed opportunities for investments by Norwegian firms in line with the efforts of the government to improve the country’s participation in the GVCs for industries.

Pascual noted that the maritime sector is one of the most important aspects of the Philippine-Norway

relations, the long tradition of cooperation has grown through the years. It has been expanded to encompass not only shipping industry but also other areas of collaboration, such as the energy sector, extractive industries like oil, gas, mining, petroleum, aquaculture, IT services, telecommunications, academic exchanges, social security, labor, and migration.

“In our efforts to further harness these opportunities, the Philippines seeks to maximize the full potential of the free trade agreement with the EFTA, composed of Iceland, Liechtenstein, Norway, and Switzerland,” he said.

He told the Norway side at the conference that as the pandemic and climate change challenges are reconfiguring GVC clusters, particularly energy, face additional pressure on shifting supply-side dynamics due to the war in Ukraine, the emergence of megatrends like destructive technology and strategic supply chain adjustments are influencing global trade and GVCs.

To strengthen the Philippines’ position in key global value chains, he told Norwegian firms the Philippines has liberalized the economy through recent policy reforms that eased foreign ownership restrictions. These are the amended Foreign Investment Act, the amended Public Service Act, and the Retail Trade Liberalization Act. In addition, our Corporate Recovery and Tax Incentives for

Enterprises (CREATE Act) provides tier-specific incentives for investors—foreign and local.

A recent decisive development on the policy front is the Department of Justice’s legal opinion, saying that under the country’s existing Renewable Energy Act, foreigners can own up to 100 percent of renewable energy projects in solar, wind, and tidal energy. This

clarification should help the Philippines attain its target of increasing renewable energy as a share in total energy supply in origin relation as renewables will account for 35 percent by 2030, growing to 50 percent by 2040.

As of November 2021, renewable energy share in the Philippines, the Philippine power generation is at 21 percent.

Given global trends, the Philippines is taking the opportunity to upgrade, diversify, and reposition its GVC participation.

A key strategic priority is to reconfigure the country’s export market into three priority clusters namely: Industry, Manufacturing, and Transport cluster, focusing on electronics, automotive, and aerospace industries.

Second, the Technology, Media and Telecommunication cluster on IT-Business Process Management Services, Artificial Intelligence, and data analytics, and third, the Health and Life Sciences cluster, covering digital health products, pharmaceutical, and pharmaceutical products.

Climate change imperatives are prompting the shift to all-electric vehicle (EV) manufacturing. This switch, which falls under the Industrial Manufacturing and Transport cluster of industries, will be the primary change in the automotive global value chain.

To join the EV or electric vehicle global value chain, we invite investments in relevant technologies, such as producing and developing pollution reduction and green vehicles, IT in vehicles, and precision metal components of EVs.

Together with EV technologies, those related to renewable energy and battery form part of the DTI green metals initiative. This program is anchored on the need for an immediate global transition to clean-energy technologies.

The so-called green metals used in cleaner-energy applications include copper, nickel, cobalt, lithium, and rare earth metal or elements. According to the World Bank Group, the production of these minerals is estimated to increase by nearly 500 percent by 2050 to meet

the demands for clean-energy technologies. It estimates that over 3 billion tons of minerals and metals will be needed to deploy low-carbon technologies.

Fortunately, the Philippines is rich in these green metals. The Philippines has an estimated 2 billion metric tons of nickel reserves, 1.1 billion metric tons of copper and 260,000 metric tons of cobalt.

He further noted of the Board of Investments (BOI), an attached agency to DTI is implementing the master development plan for a potential hub for mineral processing, particularly nickel ores. For example, the Leyte Ecological Industrial Zone (LEIZ). DTI has created a Working Group on Mineral

Processing and Battery Manufacturing to address the sector’s concerns. This working group is also tasked to develop a strategy to attract mineral processors and battery manufacturers into the country.

Battery Energy Storage System (BESS) ensures consistency of power output by providing critical support to the intermittency of renewable energy generation plants with wind or solar. This contributes to the stable energy sector needed to build up industry value chains successfully.

However, Pascual said, the Philippines still needs to attract other suppliers and expand the cluster.

“We want to link with global value chains involving Norway energy companies, especially the renewable ones. Let me take this opportunity, therefore, to invite you to partner with us to fill up value chain gaps and increase value-added activities in the Philippines,” he said.

The energy sector as the primary driver of industrial development needs sufficient, stable, and secure energy is a significant pillar for establishing and sustaining industry value chains.

Other areas open to investments and public-private partnerships are Offshore Wind (OSW), Floating Solar, Marine Energy / Tidal Stream Energy, and Liquefied Natural Gas (LNG).