PHILIPPINE BIOFUELS

21 June 2011

INTRODUCTION

The use of biofuels for transport is a major thrust of the Philippines to reduce the country’s dependence on
imported fossil fuels and to mitigate greenhouse gas emissions. To pursue this objective, the Congress
enacted Republic Act No. 9367 otherwise known as the Biofuels Act of 2006. In accordance to the mandate
of the said law, the government is presently implementing the National Biofuels Program (NBP) to promote
investments in biofuel productions and encourage the utilization of this product. Other activities that
coincide with this program are the establishment of support mechanisms to ensure adequate supply of
feedstocks and the adoption of appropriate technology for vehicles/engines to be able to use alternative fuels.

In compliance with the mandate of the law, presently available liquid fuels in the market are blended with
biofuels. Diesel engine fuel contains 2% blend of biodiesel by volume while gasoline fuel contains 5% blend
of bioethanol by volume. By 2011, the mandated blend of bioethanol will increase to 10%.

MARKET OPPORTUNITY

Increasing demand
• Biofuels Act of 2006 – created a market for biofuels through the required blend of biodiesel and
bioethanol with the standard diesel and gasoline fuel
• Bioethanol
- market characterized by demand-supply gap and big volume of imports because capacity of
existing bioethanol producers cannot meet the local demand
- opportunity is in bioethanol production
• Biodiesel
- expected spur on demand due to the recommendation of increasing the blend further from 2% to
5%

Excess supply
• Biodiesel
- market characterized by excess supply of biodiesel
- opportunity is in the exportation of excess supply of biodiesel in the market

PHILIPPINE ADVANTAGE

Resources
• Major Sources of Raw Materials
- bioethanol: sugarcane, sweet sorghum, cassava
- sustained supply of ethanol for bioethanol production because of the availability of raw
materials, particularly sugarcane, one of the major crops grown in the Philippines
- biodiesel: abundant supply of coconut oil
- rich coconut oil resource given the vast hectares of land planted with millions of coconut trees
• Yield
- bioethanol
sugarcane: 70 liters per metric ton or 4,550 liters per hectare
sweet sorghum: 5,000 liters per hectare (stalks) or 2,250 liters per hectare (grains)
cassava: 180 liters per metric ton
- biodiesel
coconut: 630 liters per metric ton

Support industries
• contract-growing scheme – farmers enter into arrangements with processors or manufacturers

Industry Studies Department 1

Board of Investments
 PHILIPPINE BIOFUELS
21 June 2011

Human resources
• Availability
- many readily available farm and factory workers knowledgeable on the details and technicalities
of farming and manufacturing in the Philippines
- big labor force that is highly skilled, educated, English-proficient and with strong and good
work ethics

INDUSTRY POTENTIALS

Growth in the number of players

• number of BOI and DOE-registered biofuel-producing companies:
- biodiesel: 12 with a total production capacity of 395.62 million liters per year
- bioethanol: 3 with a total production capacity of 79 million liters per year

Contribution to the economy

• employment generation and livelihood improvements in the rural areas
• foreign exchange savings brought about by the decrease in fuel importation

GOVERNMENT SUPPORT

Laws and policies

• The Biofuels Act of 2006 (RA 9367)
- mandates the blending of biofuels with all fuel products distributed and sold by oil
companies in the Philippines
• Omnibus Investment Code (EO 226)
- grants incentives to investment projects/activities that are listed in the Investment Priorities
Plan, which includes biodiesel
• PEZA Law (RA 7196)
- grants incentives to investment projects/activities that are located in economic zones

Development plans and programs

• provided for by the National Biofuels Program following a framework that encompasses the areas of
feedstock, industry and technology development, guidelines and standards enforcement and
evaluation and industry promotion

Financial support/guarantee
• credit assistance provided by the Land Bank of the Philippines and the Development Bank of the
Philippines for agri-based and renewable/alternative energy sources projects

Industry Studies Department 2

Board of Investments
 PHILIPPINE BIOFUELS
21 June 2011

Contacts

Board of Investments

Evariste Cagatan
Director, International Marketing Department

Industry & Investments Building

385 Sen. Gil Puyat Avenue, Makati City 1200
Tel. No.: (632) 890-1332 or (632) 895-3641
Website: http://www.boi.gov.ph

Philippine Agricultural Development and Commercial Corporation

Marriz Agbon
President

1/F Department of Agriculture

Office of the Secretary Building
Elliptical Road, Diliman, Quezon City
Tel. No.: (+632) 928-8741 loc. 2121

Industry Studies Department 3

Board of Investments