Deepening Japan-Philippines relations in the energy sector

Recently, not a single day goes by without talking about the challenges around energy and its far-reaching consequences. From ASEAN meetings, traffic congestion to OFW employment, the effects have been extensive across many areas. In this context, I would like to take this opportunity to highlight Japan’s contributions to the Philippines’ energy sector.

Examples of Japan-Philippines energy cooperation are virtually endless. The LNG receiving terminal in Batangas, jointly operated by Tokyo Gas and Prime Infra, imports LNG from overseas and supplies natural gas to an adjacent thermal power plant. Japanese companies are equally active in renewable energy. The CBK Pumped Storage Power Plant in Laguna, jointly operated by Sumitomo Corporation, J-Power and Aboitiz Power, provides ancillary services for the stable supply of electricity that sustains the daily lives of the people of Luzon and powers industries. Many Japanese companies have also invested in solar and wind energy sources.

Altogether, Japanese companies are deeply involved in the Philippines’ energy infrastructure, accounting for several gigawatts of power generation capacity across LNG, thermal, hydropower and geothermal energy. I am proud to recognize that Japanese technology and investment support the nation’s economy and the Filipinos’ daily lives. Witnessing these operations in person has been a great privilege, and seeing Japan’s contributions to the Philippine energy sector has filled me with immense pride.

While private-sector initiatives play a vital role, government-to-government efforts are equally essential in advancing sustainable and resilient energy cooperation. In this regard, progress is being made through bilateral initiatives. Last year, Japan’s Ministry of Economy, Trade and Industry (METI) and the Philippines’ Department of Energy (DOE) signed a comprehensive memorandum of cooperation on energy. The Japan International Cooperation Agency (JICA) has been dispatching experts under its technical cooperation project, “Support Project for Hydropower Potential Database Development,” while also conducting capacity-building training programs for DOE officials.

Furthermore, the Japan Bank for International Cooperation (JBIC) has concluded memoranda of understanding with three major Philippine conglomerates – the Aboitiz Power Group, the San Miguel Group and the Metro Pacific Investments Corporation – to strengthen partnerships in the energy sector. JBIC is actively working to develop collaborative projects and organize energy-related seminars for the DOE and other relevant agencies.

Even in the face of energy and fuel challenges from the situation in the Middle East, this partnership remains steadfast. It is affecting the entire global economy, particularly those of oil and gas importers from the Middle East, such as Japan and the Philippines. While over 90 percent of Japan’s oil imports also come from the region, Japan remains a reliable partner for the Philippines in securing petroleum products like gasoline and diesel. Last March 26, 140,000 liters of diesel arrived from Japan, and the supply of petroleum products continues uninterrupted. In addition, ISLA, a company backed by the Itochu Corporation, began operating an LPG receiving terminal in Batangas in February this year. LPG imported from overseas is distributed through this terminal across the Philippines.

Affecting supply chains across Asia, it becomes essential to take collective action to address these shared concerns. On April 15, Japan convened an online meeting with Asian leaders, including partner countries of the Asia Zero Emission Community (AZEC). AZEC is a framework through which Asian nations pursue decarbonization, economic growth and energy security through diverse pathways. President Ferdinand Marcos Jr. participated in the meeting on behalf of the Philippines.

Chairing the meeting, Japan’s Prime Minister Takaichi Sanae announced the launch of a new cooperative framework, the Partnership on Wide Energy and Resources Resilience Asia (POWERR Asia), built on the twin pillars of emergency response and medium- to long-term structural measures. The framework mobilizes approximately $10 billion in financial support to address both immediate and structural challenges.

First, on the emergency side, it will provide financing to procure crude oil and petroleum products to maintain supply chains across Asia. Second, on the structural side, it will aim to strengthen cooperation in building stockpiling and release mechanisms, and construct and utilize storage tanks to extend the duration of crude oil reserves of the region.

Further, it also aims to secure critical minerals, diversify energy sources through biofuels and upgrade industries through energy efficiency measures. These collective efforts are designed to support the stability of the energy sector in the Philippines and other Asian nations.

In line with these developments, former Prime Minister Kishida Fumio is expected to lead Japan’s AZEC Parliamentary Association on a visit to the Philippines later this month. In a social media post, he emphasized that this mission underscores Japan’s resolve in navigating the global oil crisis alongside the international community. The visit is particularly timely as the Philippines prepares to host the AZEC Leaders’ Summit this year.

More than 30 AZEC projects are already underway in the Philippines, centered on the expansion of renewable energy. It is my sincere hope that our shared efforts to address the imminent challenges will serve as a catalyst for AZEC to evolve further, incorporating the perspectives of economic and energy resilience. I also hope that the collaborations between Japan and the Philippines in the energy sector will continue to flourish.

It is a great honor to welcome President Marcos to Japan as a State Guest from May 26 to 29, and I look forward to his visit to further strengthen our cooperation and the bonds between our two nations.

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Endo Kazuya is the Ambassador of Japan to the Philippines.