Manila: The proposed Philippine Strategic Petroleum Reserve (PSPR) could give the country more than an emergency fuel stockpile, with the Department of Energy (DOE) saying it may also position the Philippines as a regional storage hub for oil companies seeking supply points outside traditional routes. During the Senate Committee on Energy hearing on Thursday, DOE Secretary Sharon Garin said the reserve would strengthen national security, improve supply confidence during global disruptions, and attract foreign firms willing to build or use storage facilities in the country.
According to Philippines News Agency, Garin mentioned that the government is currently in discussions with several parties, including the Maharlika Investment Corp. (MIC), Philippine National Oil Co. (PNOC), Japanese entities, Middle Eastern firms, and other foreign companies interested in the project. Garin emphasized the need for proper storage infrastructure, stating that the government may also develop additional facilities that can be leased to oil companies or constructed through partnerships with private or foreign entities.
She explained that a strategic reserve would provide stability during supply disruptions and help monitor prices since fuel availability in the domestic market would be assured. Garin informed the committee that with an initial target of one million barrels, the construction of the storage facility could take about a year, aiming for possible completion by the last quarter of 2027 or the first quarter of 2028.
Senator Erwin Tulfo, chairperson of the Senate Committee on Energy, stressed the importance of the reserve due to the Philippines' vulnerability to conflicts in the Middle East and other disruptions affecting fuel supply and prices. Garin noted the strategic advantage of the Philippines' location, making it appealing to foreign oil players looking to diversify their storage points in the region.
The reserve project could allow companies to store oil in the Philippines, pay rent for storage facilities, and potentially lead to downstream investments, such as refinery projects. Garin suggested focusing on building or providing facilities while enabling private firms to store part of their supply in the country, with the condition that fuel remains locally during emergencies.
Garin mentioned that PNOC corporate funds and MIC resources could be utilized for the project, while interest from foreign and private investors could reduce reliance on the national budget. This approach, she noted, would allow the government to allocate funds to other essential services.
Garin also highlighted the necessity for legislation to institutionalize the reserve and provide fiscal incentives to attract companies to use the Philippines as an oil storage hub. She pointed out that taxes and duties could deter fuel imports for regional storage and re-export.
DOE Undersecretary Riolita Inocencio added that the department's proposed amendments include a 60-day government supply requirement, which could be adjusted based on energy security needs and resources. Senator JV Ejercito suggested coordinating the fuel reserve plan with port and transport infrastructure planning to accommodate the project's needs.
Senate President Sherwin Gatchalian emphasized the need for a clear feasibility and financial study to evaluate the project's cost, benefits, and strategic value, ensuring public assurance of fuel availability during crises. Garin noted ongoing discussions on project structure, including potential sites, foreign technical partners, and financing sources.
