The Senate on Monday approved on the third and final reading a measure seeking to develop the natural gas industry to ensure energy security and more affordable prices for consumers by revitalizing indigenous gas explorations and developing liquefied natural gas (LNG) infrastructure in the country.

Senate Bill 2793, or the Philippine Natural Gas Industry Development Act, garnered 14 affirmative votes, three negative votes, and zero abstentions during the plenary session.

Senator Pia Cayetano, the sponsor of the bill and chairperson of the Senate Committee on Energy, said the measure aims to prioritize energy security and provide affordable prices for consumers.

“This is a momentous step forward as we strive to achieve energy security and sustainable economic growth,” she said.

She emphasized that natural gas serves as a crucial transition fuel toward renewable energy.

“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.

Cayetano assured that the law contains strong provisions for transparency and fair pricing, highlighting that indigenous gas has historically been more cost-effective than imported sources.

“This bill is good for the country, good for the environment, and good for Filipino consumers,” she said.

Support and concerns

Senator Raffy Tulfo urged his fellow senators to consider the potential benefits of developing natural gas and reflect on policies supporting a transition from coal to natural gas.

“It is difficult to rely on others. And we’ve been with other countries that are too dependent on foreign sources such as some of our neighbors in Southeast Asia,” he said.

Tulfo emphasized that the bill provides incentives for private investment in natural gas development, which can reduce reliance on foreign sources and increase stability in the energy sector.

Tulfo explained that natural gas offers stability against weather-related disruptions and can prevent sudden price fluctuations in the energy market, making energy more accessible for ordinary Filipino households, not just large businesses.

Opposing lawmakers

Among the senators who voted against the measure were Senate Minority Leader Aquilino "Koko" Pimentel III, Deputy Minority Leader Risa Hontiveros, and Senator Sherwin Gatchalian.

Hontiveros expressed concern that the bill could undermine the “least-cost” principle, which she argued is crucial to protecting consumers against unreasonable electricity prices.

“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 said.

She further warned that the bill might allow the domestic natural gas sector to operate without pressure to match regional and global market prices, potentially creating a guaranteed market even for inefficient wells.

Hontiveros noted that this could also affect the renewable energy sector’s potential to reduce electricity costs.

She also raised concerns about the bill’s provision on cross-ownership, objecting to the decision to exclude the Energy Regulatory Commission from determining cross-ownership limits for LNG facilities.

Gatchalian, vice chairperson of the Committee on Energy, acknowledged the benefits of developing indigenous natural gas but opposed prioritizing it over other conventional energy sources that might offer lower bids.

“Our foremost obligation is to ensure that the welfare of our people remains at the center of our legislative actions, especially when it comes to energy pricing, which has a direct impact on every Filipino household,” he said, lamenting the need to balance the cost impact on consumers.

Gatchalian criticized the measure for prioritizing indigenous natural gas even if other sources offer lower bids, which he warned could lead to higher spot prices and increased costs for consumers.

He also raised concerns over the lack of competitive bidding or price discovery mechanisms for procuring indigenous natural gas, arguing that this could lead to unregulated pricing, placing an undue burden on consumers.

Cayetano’s response

Cayetano countered her colleagues’ concerns, especially regarding potential additional costs to consumers.

“To be very, very clear, we have price mechanisms. We have transparency. The law is very clear about fair and open access. It’s not true that the price will not be disclosed. It's not true that consumers will be forced to pay high prices. I've shown this on the chart many times to our fellow citizens and our colleagues, and historically, the price of indigenous gas has been extremely low,” she said.

“Let's not scare our countrymen that electricity costs will increase if we prioritize indigenous gas. That's not true,” she added.