Let me greet Ambassador Christian Lyster, which I understand just starting his tour duty a few days ago, our Ambassador of Norway Rico Fos, Congressman Rex Gatchalian, and Mr. Carl Faannessen, let’s talk about togetherness.

It is a pleasure to join you today and I’m very happy to have this opportunity to speak on the topic of “Creating Value Chains for Industries” under your Conference theme ¨Creating Currents Together.¨ The Philippines would like to create clean electric currents with Norway—so to speak—given that 98% of Norway’s electricity and sun is produced using renewable method resources.

The Philippines and Norway have enjoyed a longstanding bilateral relationship since the establishment of diplomatic relations way back in March 1948, before I was born. Next year, as we mark the diamond anniversary of our diplomatic relations, let us recognize our common heritage that goes centuries back. To seafaring to our respective seafaring ancestors. Remember, the Philippines is an archipelagic state.

The maritime sector is one of the most important aspects of the Philippine-Norway relations, the long tradition of cooperation has grown through the years. It has been expanded to encompass not only shipping industry but also other areas of collaboration, such as the energy sector, extractive industries like oil, gas, mining, petroleum, aquaculture, IT services, telecommunications, academic exchanges, social security, labor, and migration.

In our efforts to further harness these opportunities, the Philippines seeks to maximize the full potential of the free trade agreement with the European Free Trade Association (EFTA), composed of Iceland, Liechtenstein, Norway, and Switzerland. 

The pandemic and climate change challenges are reconfiguring global value chains (GVCs). Global value chain clusters, particularly energy, face additional pressure on shifting supply-side dynamics due to the war in Ukraine.

Even before the pandemic, the emergence of megatrends like destructive technology and strategic supply chain adjustments are influencing global trade and global value chains.

These challenges of megatrends provide the Philippines with the opportunity for investment in enterprises that can participate in the global value chains of certain industries. We are promoting the country as an investment destination, capitalizing on recent policy reforms that have made the country more attractive to foreign investors. President Marcos Jr. has repeatedly declared that the Philippines is now open for business.

To strengthen our position in key global value chains, the Philippines has liberalized the economy through recent policy reforms that eased foreign ownership restrictions. These are the amended Foreign Investment Act, the amended Public Service Act, and the Retail Trade Liberalization Act. In addition, our Corporate Recovery and Tax Incentives for Enterprises (CREATE Act) provides tier-specific incentives for investors—foreign and local.

A recent decisive development on the policy front is the Department of Justice’s legal opinion, saying that under the country’s existing Renewable Energy Act,  foreigners can own up to 100% of renewable energy projects in solar, wind, and tidal energy. This clarification should help the Philippines attain its target of increasing renewable energy as a share in total energy supply in origin relation we mix of 35% renewable by 2030, growing this to 50% by 2040.

As of November 2021, renewable energy share in the Philippines, the Philippine power generation is at 21%. We need a 14-percentage point leap in eight years and another 15-percentage leap or jump in 10 years after 2030 to get the target of 50% by 2040.

Given global trends, the Philippines is taking the opportunity to upgrade, diversify, and reposition its Global Value Chain participation. A key strategic priority is to reconfigure the country’s export market into three priority clusters namely: The Industry, Manufacturing, and Transport cluster, focusing on electronics, automotive, and aerospace industries. Second, the Technology, Media and Telecommunication cluster on IT-Business Process Management Services, Artificial Intelligence, and data analytics, and third, the Health and Life Sciences cluster, covering digital health products, pharmaceutical, and pharmaceutical products.

Climate change imperatives are prompting the shift to all-electric vehicle (EV) manufacturing. This switch, which falls under the Industrial Manufacturing and Transport cluster of industries, will be the primary change in the automotive global value chain. To join the EV or electric vehicle global value chain, we invite investments in relevant technologies, such as producing and developing pollution reduction and green vehicles, IT in vehicles, and precision metal components of EVs.

Together with EV technologies, those related to renewable energy and battery form part of the DTI green metals initiative. This program is anchored on the need for an immediate global transition to clean-energy technologies.

The so-called green metals used in cleaner-energy applications include copper, nickel, cobalt, lithium, and rare earth metal or elements. According to the World Bank Group, the production of these minerals is estimated to increase by nearly 500% by 2050 to meet the demands for clean-energy technologies. It estimates that over 3 billion tons of minerals and metals will be needed to deploy low-carbon technologies.

Fortunately, the Philippines is rich in these green metals. We have estimated 2 billion metric tons of nickel reserves, 1.1 billion metric tons of copper and 260,000 metric tons of cobalt.

BOI, an attached agency to DTI is implementing the master development plan for a potential hub for mineral processing, particularly nickel ores. For example, the Leyte Ecological Industrial Zone (LEIZ). DTI has created a Working Group on Mineral Processing and Battery Manufacturing to address the sector’s concerns. This working group is also tasked to develop a strategy to attract mineral processors and battery manufacturers into the country.

Battery Energy Storage System (BESS) ensures consistency of power output by providing critical support to the intermittency of renewable energy generation plants with wind or solar. This contributes to the stable energy sector needed to build up industry value chains successfully.

However, we still need to attract other suppliers and expand the cluster. We want to link with global value chains involving Norway energy companies, especially the renewable ones. Let me take this opportunity, therefore, to invite you to partner with us to fill up value chain gaps and increase value-added activities in the Philippines.

As we all know, the energy sector is the primary driver of industrial development. Sufficient, stable, and secure energy is a significant pillar for establishing and sustaining industry value chains.

Other areas open to investments and public-private partnerships are Offshore Wind (OSW), Floating Solar, Marine Energy / Tidal Stream Energy, and Liquefied Natural Gas (LNG).

As the flow of electrons causes electric current, so does the flow of Foreign Direct Investment to create value chains for industries in the Philippines. So, together, let us make clean energy happen in the Philippines!

Thank you and good day to all!

Date of Release: 18 October 2022