By Wilnard Bacelonia | Philippine News Agency
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.
Garin said the government is in talks 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.
“One thing for sure, we need our own proper tanks,” Garin said, noting that the government may also develop additional facilities that can be leased to oil companies or built through business arrangements with private or foreign partners.
She said having a strategic reserve would give the country confidence in times of supply disruption and could help authorities better monitor prices because fuel would remain available in the domestic market.
Garin told the committee that if the initial target is one million barrels, construction of the storage facility could take about one year, with the timetable now being studied for possible completion by the last quarter of 2027 or the first quarter of 2028.
Senator Erwin Tulfo, chairperson of the committee, said the reserve is crucial because the Philippines remains vulnerable to conflicts in the Middle East and other disruptions that may affect fuel supply and prices.
Garin said the Philippines’ location makes it attractive to foreign oil players that want to diversify storage points in the region.
“I think they’re also spreading it out. They have it in other countries. So, they’re also willing here. Because our location is also good; we’re practically in the middle of it,” she said.
She said the reserve project could allow companies to store oil in the Philippines, pay rent for storage facilities, and possibly even lead to downstream investments, such as refinery projects.
Garin said the government could focus on building or making available facilities while allowing private firms to store part of their supply in the country, provided that fuel would be retained locally during emergencies.
“Facilities lang atin, as much as possible. So we can have our own minimum na ilang days, pero we can also have other companies store it here and have a condition na in case of emergency, dapat may mari-retain dito sa bansa,” she said.
She said PNOC corporate funds and MIC resources could be tapped for the project, while foreign and private investors have also expressed interest, reducing the need to draw heavily from the national budget.
“So, hopefully with what we’re designing, we won’t get it from the (budget) so the government can use it in more basic services,” Garin said.
Law to institutionalize reserve
Garin said the PSPR may proceed as a PNOC project even without a new law, but legislation would be needed to institutionalize the reserve and provide the fiscal incentives needed to make the Philippines attractive as an oil storage hub.
She said incentives are important because taxes and duties could discourage companies from bringing fuel into the country for regional storage and re-export.
DOE Undersecretary Riolita Inocencio said the department’s proposed amendments also include a 60-day government supply requirement, which the DOE may gradually adjust depending on energy security needs and available resources.
Senator JV Ejercito said the fuel reserve plan should already be coordinated with port and transport infrastructure planning, noting that the project would require not only tanks but also ports and support facilities.
Garin said the initial phase could be built in about a year, while additional capacity could be added gradually as private firms participate.
Senate President Sherwin Gatchalian said the concept of a strategic petroleum reserve is not new, but the government must now produce a clear feasibility and financial study to determine the project’s cost, benefits, and strategic value.
He said the country needs mechanisms to assure the public that fuel supply will remain available during crises, especially as another disruption could happen “tomorrow” or “next month.”
Garin said talks are moving toward a more concrete project structure, with discussions involving possible sites, foreign technical partners, and financing sources.
