Indonesia assures Philippines of coal supply

MANILA, Philippines — Indonesia has assured the Philippines of uninterrupted coal supply which the country heavily needs to sustain operations of its coal-fired power facilities.

“In the case of Indonesia and the Philippines, we discussed with Indonesia  the (plan of) making sure that the Philippines continues to have access to regular coal supply,” Energy Secretary Raphael Lotilla said.

The Philippines sources majority of its coal imports from Indonesia.

“As you know, almost 80 percent of our coal supply for our coal-fired power plants and for non-power uses is sourced abroad. It's imported. And 98 percent of this imported coal is from Indonesia,” Lotilla said.

“Indonesia reiterated to us its assurance that the Philippines will continue to get continued supply for its coal-fired power plants,” he said.

Indonesia in January 2022 implemented a month-long coal export ban because of a domestic shortage and avert a looming power crisis.

The policy alarmed the government, with then Energy secretary Alfonso Cusi calling it “detrimental to economies that (currently) rely on coal-fired power generation systems like the Philippines.”

“They explained the reason. It was because they had a two-tiered pricing system where the prices for domestic use of coal was much lower than the export prices. So the Indonesian miners would rather sell to the international market, the export market, than to the domestic ones. And it reached a point that they were running out of supply for their domestic coal-fired power plants and that's why they had to impose a moratorium," Lotilla said.

”But now, they gave an assurance that they will make sure that we will have an uninterrupted supply,” the energy chief said.

The Philippines in 2016 also experienced a similar ban on coal exports from Indonesia.

Indonesia then imposed a moratorium on any Indonesian-flagged vessel to sail to the Philippines following the kidnapping by Abu Sayyaf bandits of several Indonesian sailors on board a coal tugboat in the Sulu Sea.

The ban also covered vessels containing coal shipments.

Meanwhile, Lotilla said energy ministries of the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asian Growth Area (BIMP-EAGA) have also agreed to discuss under their bilateral memorandum of cooperation a so-called “emergency response or assistance in case again of supply constraints.”

“In other words for a BIMP-EAGA member like the Philippines that is importing coal from Indonesia, then we can have arrangements whenever there are constraints. So, these are some of the things that that we discussed,” he said.