Voting 14-3, the Senate approved on Monday, Nov. 11, Senate Bill No. 2793 or the Philippine Natural Gas Industry Development Act on third and final reading.
During the plenary session, Senator Pia Cayetano, who chairs the Senate Committee on Energy, said that the landmark legislation aims to prioritize indigenous natural gas development, ensuring energy security and more affordable prices for consumers.
"This is a momentous step forward as we strive to achieve energy security and sustainable economic growth," Cayetano emphasized, noting that natural gas serves as a crucial transition fuel towards renewable energy.
"This legislation supports our own and also international commitments to cleaner and more efficient energy production," she added.
Cayetano assured that the law includes strong provisions for transparency and fair pricing, highlighting how indigenous gas has historically been more cost-effective than imported sources and how it benefits Filipino consumers and the environment.
Cayetano also expressed gratitude to her colleagues who supported the passage of the measure which she said will benefit the country and the next generation because historically, indigenous natural gas has been cheaper.
“We have to remember that natural gas is a transition fuel and our goal is to move to renewables. This means also protecting consumer welfare because with the entry, we promote the encouragement of more investments in natural gas. We will have energy security that will be able to provide for more accessibility to natural gas and consumers will be able to benefit from this,” she explained.
"We are looking forward to seeing the benefits of this measure, not tomorrow or by the end of the year, because energy security is a generational commitment. This is for the next generation. We hope to live healthy lives to witness the benefits of this measure," she stated.
The senator emphasized that the passage of the measure would ensure the country's supply, rather than making it dependent on imported natural gas.
“We take a stand and we decide that we want to develop our own indigenous sources…This is a transition fuel that we are also saying bigyan ng priority because indigenous fuel to, hindi lang puro importation,” Cayetano said.
Cayetano also refuted claims that the measure would lead to higher electricity costs.
In explaining his affirmative vote, Senator Raffy Tulfo emphasized that relying on foreign energy sources is not a viable strategy for achieving energy security.
He said this was validated when the conflict between Russia and Ukraine began in 2022, which led to the oil industry being held hostage by factors beyond everyone's control.
The senator warned that the country should not rely on "luck and external circumstances" to ensure its essential services, economic infrastructure, and continuity of business operations. While a strong advocate for renewable energy, Tulfo acknowledged the limitations currently present.
"Natural gas has been identified as a reliable fuel for power plants that can address the peak, mid-merit, and baseload demands of the country, helping to achieve energy security while gradually transitioning to renewable energy sources," the measure states.
Tulfo said natural gas is crucial to Philippine energy security, and it is imperative for the country to develop its own indigenous sources of gas, as excessive reliance on external sources could be costly.
"We've observed this in other countries that are overly dependent on foreign energy sources, including some of our neighbors in Southeast Asia. The Natural Gas Act provides sufficient incentives for private entities to develop indigenous resources and ensure total independence from foreign energy," Tulfo noted.
“The provisions of the bill will ensure that there are no sudden price fluctuations in the energy market, making energy more accessible and affordable for everyone, not just large businesses, so that regular Filipino households will benefit from this legislation," he said.
No vote
Meanwhile, Senator Risa Hontiveros, who voted against the measure, said that her primary reasons for opposing this bill align with some of the deep concerns articulated by Senator Sherwin Gatchalian.
"This bill prioritizes indigenous natural gas, potentially undermining the 'least-cost' principle, which is a crucial safeguard for Filipino consumers against unreasonable electricity prices," she said.
Hontiveros said that this departure from the least-cost principle of EPIRA - as a principle and procedural guide - pertains to fuel selection by the aggregator and generators, generator selection by distribution utilities, and dispatch of generators by the WESM, and is simply unacceptable.
She also raised that the bill's stance on cross-ownership is particularly troubling.
"My proposed amendment, which would have granted the Energy Regulatory Commission (ERC) the authority to determine cross-ownership limits for LNG facilities, was rejected. This amendment was inspired by concerns over badly regulated, potentially misbehaving monopolies, particularly in the transport segment of the gas industry," she said.
"This bill, in its current form, could perpetuate past mistakes in our energy sector. I urge my fellow senators to carefully consider these concerns as we proceed with this important legislation," she added.
Gatchalian, on the other hand, said the absence of a competitive bidding mechanism for procuring indigenous natural gas under a proposed measure to develop the local natural gas industry could lead to higher energy prices to the detriment of consumer interest.
“Competitive bidding serves as a means to discover the lowest possible price, promoting efficiency among investors and ensuring that consumers benefit from the most affordable rates. Without this essential process, there is no concrete assurance that consumers will pay the lowest price, and investors will render the most efficient service,” Gatchalian said as he explained his “No” vote for the proposed Philippine Natural Gas Industry which recently went through third and final reading.
Gatchalian explained that competitive bidding serves as a means to discover the lowest possible price, promoting efficiency among investors and ensuring that consumers benefit from the most affordable rates.
He added that without this essential process, there is no concrete assurance that consumers will pay the lowest prices and investors will render the most efficient service.