Manila: The Philippines, keen to ramp up its strategic sectors, is pursuing industrial and energy investments from leading Gulf economies, Saudi Arabia and the UAE.
A landmark Philippine-Saudi energy cooperation deal was signed on Monday during a meeting between Saudi Arabia's Minister of Energy, Prince Abdulaziz bin Salman bin Abdulaziz, and Philippine Energy Secretary Raphael Lotilla.
The two officials signed the Memorandum of Understanding (MoU), the first such document signed by the two countries, focussing on collaboration on a wide range of energy-related fields.
The meeting, held in Riyadh, focused on investment opportunities and collaboration in several areas – including petroleum, gas, electricity, renewable energy, energy efficiency.
Circular economy
It also covers initiatives such as carbon capture, utilisation, and storage (CCUS), and “circular economy technologies”, aimed at mitigating the effects of climate change.
Both leaders emphasised mutual interest and explored potential investment opportunities and strategies.
Private sector representatives from Manila also met their counterparts in the Kingdom and discussed potential areas of cooperation.
Marcos visit
The MOU signing follows a visit by Philippine President Ferdinand R. Marcos Jr to Riyadh in October 2023 during the landmark Asean-GCC summit, the first time member-states of the two blocs gathered together to tackle regional and international issues and future cooperation.
Vision 2030, Target 2040
Saudi Arabia’s Vision 2030 has set an ambitious target of generating 50 per cent of its energy from renewable sources by the end of the decade.
The Philippines, which relied on fossil fuels for 78 per cent (mostly coal) of its electricity in 2023, aims to boost the share of renewables in its power supply mix to 50 per cent by 2040, a target set by the Department of Energy.
The Philippines, which has opened up key industries to 100-per cent foreign ownership, is on a global drive to tap investments that would help the Asian country meet an expected spike in power demand, while lowering rates to support its development goals.
• Its primary goal: Faster investment processing, boost to strategic sectors (renewable energy, infrastructure, and manufacturing), foster an investment-friendly climate, support for economic growth and local job creation.
Beyond energy
Beyond traditional energy sectors, the agreement also emphasises the need for cooperation in digital transformation, innovation, cybersecurity, and artificial intelligence.
Both countries recognised the potential of these technologies to enhance energy efficiency and sustainability.
To further strengthen their partnership, Saudi Arabia and the Philippines committed to developing partnerships that localise materials, products, and services across all energy sectors.
The agreement also promotes the use and development of sustainable polymeric materials in construction and other industries. It marks a significant milestone in the Saudi-Philippine bilateral relations, paving the way for increased collaboration and investments.
600-million-peso investments from the UAE
The Philippines is also looking to attract investments from the UAE in key sectors.
Secretary Maria Cristina Roque of the Department of Trade and Industry told local media that at least two UAE companies have shown strong interest in investing in the Philippines.
Dubai-based DP World is actively seeking local partners and exploring opportunities for port development. she said.
Earlier this year, DP World, in partnership with the Philippines' Asian Terminals Inc., launched the Tanza Barge Terminal in Cavite (about 42km south of Manila) to enhance the efficiency of cargo transport to and from the capital.
Roque also mentioned that Abu Dhabi-based Masdar plans to invest at least 600 million pesos ($10.4 million), focusing on solar and wind energy projects, and is currently in the process of identifying a suitable location "as soon as possible," she added.
The Asian country posted a year-on-year GDP growth of 6.3 per cent in the second quarter of 2024. The Asian Development Bank maintained its growth forecast for the Philippine economy at 6.0 per cent for 2024 and 6.2 per cent in 2025.
In December 2023, the UAE Ministry of Foreign Affairs reported that the Philippines and the UAE signed the terms of reference (TOR) to begin negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between the two countries. Talks are expected to be wrapped up before end-2024.
By attracting investments from leading Arab economies, the Philippines is widening its economic partnerships in order ensure a more secure and sustainable future.
