Locally-sourced natural gas gets priority over imported liquefied natural gas (LNG) under a circular the Department of Energy (DoE) has issued.

It mandated power plants and users of natural gas to select domestic sources to reinforce the government’s commitment to energy security and self-sufficiency.

Department Circular DC2025-09-0013 signed by Energy Secretary Sharon Garin on 1 September 2025 mandated natural gas’ procurement and utilization should be from indigenous natural gas. 

The directive outlined the country’s framework for sourcing, pricing, and aggregating indigenous natural gas, as stipulated under the Philippine Natural Gas Industry Development Act or Republic Act 12120, which provided that “All users of natural gas shall first utilize available quantities of indigenous natural gas.”

Importation is only allowed under specific conditions, such as when local gas prices surpass those of imported LNG for three consecutive months.

In such cases, importation can only occur for a temporary period not exceeding three months, and it must comply with existing contractual obligations.

The newly issued guidelines emphasize the importance of prioritizing local gas to minimize reliance on unstable international markets, reduce transportation costs, and promote domestic exploration. 

Contracts must not be violated

However, this must be done without violating existing contracts, a stipulation echoed in both the law and the DoE’s guiding principles.

The policy only applies to the available capacities of existing local gas producers as of the circular’s effective date, thus limiting its immediate coverage to the current supply from indigenous fields. 

The circular also introduces the concept of gas aggregation, a system that allows designated entities, known as aggregators, to procure indigenous natural gas, combine it with imported LNG, and resell the aggregated mix.

The DoE will determine these aggregators, but the policy will not take immediate effect. 

The DoE will create an Indigenous Gas Prioritization-Review and Evaluation Committee to oversee the implementation of this policy. The committee will be responsible for reviewing and evaluating pricing methodologies, addressing clarifications regarding pricing, and implementing other necessary measures to ensure proper execution of the rules.

The circular also required all indigenous natural gas suppliers and aggregators to provide fair and open access to their supply in a non-discriminatory and transparent manner.