Francis Perez

READING THE CURRENTS

The Philippines’ Strategic Window in the Energy and Critical Minerals Transition

Part I – It would be a mistake to read the disruption around the Strait of Hormuz simply as another geopolitical crisis affecting the price of oil. Energy security has never really been just about price. It is about physical infrastructure, geography, political alliance, and who controls the systems through which energy actually moves. Since the United States and Israel struck Iran in late February 2026, Iran has mined the strait’s approaches and attacked merchant shipping, cutting oil and petroleum flows through the passage by nearly 30 percent in the first quarter of the year (Institute for Energy Research, 2026). Before the war, close to a quarter of the world’s seaborne oil and a fifth of its liquefied natural gas moved through this one channel (International Energy Agency, 2026). There is no infrastructure built to carry that volume anywhere else.

While the world worries about oil and gas, a second energy story has been gathering momentum more quietly. As transport, industry, and power systems electrify, the strategic importance of minerals grows with them. Batteries need nickel, cobalt, lithium, manganese, and graphite. Electricity grids need enormous quantities of copper. Renewable energy systems need copper, nickel, rare earth elements, and other specialised materials. Semiconductors and advanced technologies depend on still more of them. It is no longer only who controls the oil and gas that matters. Increasingly, the strategic question is who controls the minerals, the processing capacity, and the electricity needed to turn those minerals into the technologies the next economy will run on.

It is easy to underestimate China’s position in that processing stage. It is the leading refiner for nineteen of the twenty minerals the International Energy Agency tracks as strategically important, with an average global market share around 70 percent (International Energy Agency, 2025). For rare earths, China mines roughly 60 percent of world supply but refines around 91 percent of it. For lithium, nickel, and cobalt, it often mines only 10 to 30 percent of global supply yet still refines 60 to 70 percent (Belfer Center for Science and International Affairs, 2025). Ore dug up almost anywhere in the world usually still passes through a Chinese refinery before it becomes a usable input. This is why Western industrial policy has begun paying a deliberate premium for minerals refined elsewhere, in countries considered geopolitically aligned. It is also why the Philippines, historically a minor character in this story, deserves a closer look.

A Broader Mineral Base Than the Nickel Headlines Suggest

Nickel is the obvious place to start, and the figures are genuinely striking. The Philippines is the world’s second-largest producer of mined nickel, accounting for roughly 10 percent of global output and holding about 10.5 percent of known reserves, third-largest in the world (Philstar, 2025). It is the largest exporter of raw nickel ore outright, sitting on an estimated $170 billion in deposits, with processing potential identified in Zambales, Surigao, Dinagat, and Palawan (US International Trade Administration, 2025).

But nickel is only part of the picture. Copper deserves considerably more attention than it usually gets: the Philippines holds an estimated four billion tons of copper ore, placing it among the world’s more significant copper-reserve holders, and Philippine Statistics Authority data shows the country’s Class A copper reserves rose almost 22 percent in 2024 alone (Philippine Statistics Authority, 2025; Vantage FDI, 2025). Copper may end up mattering more than nickel as electrification accelerates, since grids, transmission lines, motors, and charging infrastructure are all copper-intensive in a way few other applications are.

Cobalt is the mineral most worth adding to the conversation, precisely because it sits alongside nickel and lithium in every one of the refining statistics above. Philippine nickel operations already produce mixed nickel-cobalt sulphide, since cobalt is commonly recovered as a by-product of nickel and copper processing rather than mined on its own (Vantage FDI, 2025). That makes nickel, copper, and cobalt a genuinely linked story rather than three separate ones — a single processing chain that, if built out, could yield more than one strategic mineral from the same investment.

The country is also a significant gold producer, and gold actually overtook nickel as the largest single mineral export by value in 2024, generating roughly ₱126 billion from under 29,000 kilograms produced (Chambers and Partners, 2026). Gold is not a critical mineral in the same sense as nickel or copper, and its connection to the energy transition is modest – mainly through its use in electronics and chip packaging – but it remains a large part of the country’s overall mineral wealth and is commonly recovered alongside silver in the same operations. Gold’s renewed significance as a reserve asset amid the broader wave of central bank accumulation now underway worldwide gives this endowment an added dimension worth noting. Managed well, it is a resource that could help finance, or itself be held against, the country’s own ambitions in minerals processing and recycling, rather than one whose relevance ends at the export ledger. Chromite, concentrated in Eastern Samar and Zambales, is smaller still, used mainly in stainless steel and alloys rather than batteries, but its reserve value more than doubled in 2024 off a small base and it rounds out a genuinely diversified resource picture (Philippine Statistics Authority, 2025).

The more speculative but interesting addition is rare earth elements. The Philippines is not yet a producing country, but geologists have identified three distinct types of deposit: ion-adsorption clays in Palawan, bauxite-hosted rare earth mineralisation on Samar, and scandium-bearing nickel laterites in Zambales, with grades at some sites comparable to cut-off grades used in southern China’s rare earth industry (Rare Earth Mining, 2026). In February 2026, the Philippines signed a critical minerals memorandum with the United States at a ministerial meeting attended by more than fifty countries and the European Commission, explicitly citing the country’s rare earth potential among the reasons for the partnership (Philippine News Agency, 2026b). Given how central China’s rare earth dominance is to the argument above, this is a thread worth pulling rather than leaving aside. There is a further, less obvious connection worth naming: high-purity silica sand and quartz, the literal feedstock for silicon wafers, are also present in the Zambales and Tarlac area now central to the country’s semiconductor ambitions. The mineral that gives the wider Pax Silica initiative its name is, in a very direct sense, one the Philippines is now being asked to help supply.

The Real Bottleneck Is Electricity, Not Geology

Mining ore is only the first step. The real economic value sits further along the chain –  concentration, smelting, refining, processing, and eventually manufacturing – and every one of those stages needs electricity that is not just available, but also reliable and competitively priced. So the country holds minerals the global energy transition increasingly needs, and it has considerable renewable energy potential of its own, but it needs affordable, reliable, and increasingly clean power to process the very minerals that will build the world’s clean energy economy. Where electricity remains expensive or carbon-intensive, Philippine processors will keep losing out to processing centres elsewhere, however rich the deposits underneath them.

It follows that mining and renewable energy should not be treated as separate sectors. They are increasingly parts of the same emerging industrial system. Clean power enables mineral processing; mineral processing creates demand for reliable power; and domestic processing, in turn, creates demand for engineering, logistics, fabrication, maintenance, and finance.

Policy Has Started to Catch Up

In December 2025 the United States convened the founding summit of Pax Silica, a coalition that has grown from seven founding members to more than twenty by mid-2026, built around securing semiconductor, artificial intelligence, and critical-mineral supply chains outside China (Philippine News Agency, 2026a; Rappler, 2026a). The Philippines joined in April 2026 as the coalition’s thirteenth member and, by July, had become host to one of its flagship projects: a roughly 1,620-hectare industrial hub at New Clark City, Tarlac, described as the first “AI-native” zone under the initiative (Philippine News Agency, 2026a; Avasant, 2026). Government officials have stated plainly that the purpose of the hub is to keep critical minerals processed within the country rather than exported raw (GMA News Online, 2026) – precisely the value-chain problem described above, now stated as deliberate national policy rather than left to individual firms to solve unassisted. Government estimates put the expected investment at up to $70 billion and direct employment as high as 190,000 jobs (Rappler, 2026b).

It is a signal that governments are starting to think differently about the relationship between economic security, technology, energy, and mineral supply chains, and the Philippines has, for the first time, positioned itself inside that thinking rather than outside it. But a signal and an opening are not the same thing as a settled outcome, and that opening deserves scrutiny.

The Concerns Deserve a Fair Hearing

Large industrial and strategic projects of this kind have drawn legitimate, organised concern from several directions, and none of it should be waved aside as reflexive opposition to development. Environmental and Indigenous rights organisations have warned about the potential displacement of thousands of residents and farmers, unresolved ancestral land claims, and stress on the watershed the hub depends on (PhilSTAR Life, 2026). Farmer groups have raised similar concerns about land and livelihoods, and there have been public calls for the consent process to be genuine and independently verifiable rather than asserted after the fact (Inquirer.net, 2026b). Some legislators have questioned whether the arrangement deepens dependence on a single foreign power behind a development label. The most detailed challenge has come from the Makabayan bloc, which filed House Resolution 1128 in June demanding the government disclose “all legal instruments, binding commitments, and operational details” tied to the project (Politiko, 2026). That demand has since broadened well beyond one bloc. House minority members led by Edgar Erice and Leila de Lima filed a separate resolution in August seeking a congressional inquiry into the agreement’s implications for sovereignty and security (Manila Times, 2026b), and in the Senate, both Raffy Tulfo and Imee Marcos have pushed for their own investigations into the deal’s economic, environmental, and national-security dimensions (Ground News, 2026). Kabataan Rep. Renee Co has separately warned that the initiative could accelerate extraction of high-purity silica sand and quartz in Zambales and Tarlac — the very feedstock the hub’s own semiconductor ambitions depend on — at the expense of local communities and farmland (Manila Times, 2026a). Economists and researchers have questioned whether the government’s job figures conflate temporary construction work with permanent, higher-value roles, and whether the more skilled technical positions will actually go to Filipino workers rather than to expatriate staff (Rappler, 2026b).

The government’s and project proponents’ responses deserve equal specificity rather than being set aside alongside the criticism they answer. Officials have stated that the project will draw no water from communities or groundwater, relying instead on rainwater harvesting sized to a capacity BCDA says exceeds projected demand (Inquirer.net, 2026c), though an independent estimate puts demand at roughly 130 million litres a day – above that stated capacity range (Inquirer.net, 2026a). They have noted that a substantial share of the wider economic zone’s land has already been allocated to Indigenous groups, and that the specific project site has been earmarked for industrial use since the relevant development authority’s founding legislation more than three decades ago (Inquirer.net, 2026c). They have also characterised the initiative as industrial and technological rather than military in nature (Avasant, 2026).

None of the responses above address a separate question: the carbon cost of the processing shift the initiative is built around – less visible in the public debate so far than land, water, and sovereignty questions. The Philippines has historically exported over 90 percent of its nickel ore raw to China, which absorbs the emissions-intensive smelting and refining stage offshore (Philstar.com, 2026). Ending that arrangement, which officials have stated is the explicit intent of the hub, means bringing that stage onshore for the first time at scale. Indonesia offers the closest comparator, since it processes the same laterite ore type, and the experience is not encouraging: nickel smelting there, run largely on captive coal plants built specifically to serve industrial parks disconnected from the national grid, accounts for nearly 98 percent of the sector’s emissions, with the country’s four largest processors on track to add close to 39 million tonnes of CO2 equivalent annually by 2028 – roughly 4.5 percent of Indonesia’s total national emissions from processing alone (WRI, 2026; IEEFA, 2024). The outcome is not fixed by the ore itself. Vale’s Sorowako facility, powered by hydropower rather than coal, runs at less than half the sector’s average carbon intensity, which indicates the power source is the determining variable, not the mineral chemistry (IEEFA, 2024). The Philippines holds a structural advantage here that Indonesia’s remote, grid-disconnected nickel belt never had – established geothermal capacity that could in principle power New Clark City’s processing without reproducing Sulawesi’s captive-coal model. Whether that advantage gets used is a matter still open to negotiation in the framework agreement, not a fact already settled by geology or by government assurances offered so far.

The sensible position is neither automatic opposition nor automatic endorsement of either side. Proponents and critics are both making specific, checkable claims – on water, on land, on jobs, and now on carbon – and the more useful exercise is asking what would actually verify each of them. The carbon question is arguably the one furthest from being checkable at this stage, since it depends on a power-source and technology choice not yet made public, let alone locked into the framework agreement. What would need to be true nationally, not just project by project, is that the Philippines uses this moment of genuine negotiating leverage – before signatures, not after – to make renewable power a binding condition of onshore processing rather than an aspiration announced once construction is already underway.

Part II turns to the other half of this picture – where the investment opportunity actually sits, and what would have to change institutionally for it to become genuinely shared development rather than a faster version of the extraction the country already knows.

References

Avasant (2026) Pax Silica and the Philippines: What the New Economic Security Zone Means for Global Supply Chains.

Belfer Center for Science and International Affairs (2025) Critical Minerals Explained: Why They Matter for Geopolitics, Clean Energy & Tech. Cambridge, MA: Harvard Kennedy School.

Chambers and Partners (2026) Mining 2026 – Philippines, Global Practice Guides.

GMA News Online (2026) ‘EXPLAINER: What is Pax Silica and why are people worried?’.

Ground News (2026) ‘Senate urged to assess Pax Silica impact’.

IEEFA (2024) Indonesia’s Nickel Companies: The Need for Renewable Energy Amid Increasing Production. Sydney: Institute for Energy Economics and Financial Analysis, 24 October.

Inquirer.net (2026a) ‘Pax Silica brings promise – but at what cost?’.

Inquirer.net (2026b) ‘Pangilinan: Farmers’ welfare must not be ignored in Pax Silica project’.

Inquirer.net (2026c) ‘Myths vs facts: BCDA allays fears on controversial Pax Silica project’.

Institute for Energy Research (2026) ‘New EIA report shows extent of Hormuz oil disruptions’, 22 May.

International Energy Agency (2025) Global Critical Minerals Outlook 2025. Paris: IEA.

International Energy Agency (2026) Strait of Hormuz. Paris: IEA.

Manila Times (2026a) ‘Malacañang backs Pax Silica initiative’, 21 July.

Manila Times (2026b) ‘House minority lawmakers seek inquiry into Pax Silica agreement’, 1 August.

Philippine News Agency (2026a) ‘Pax Silica hub to boost PH role in global AI value chain’, 27 July.

Philippine News Agency (2026b) ‘PH-US pact to push for local processing of critical minerals’, 6 February.

Philippine Statistics Authority (2025) Value of Philippines’ Class A Gold, Copper, Nickel, and Chromite Reserves and Resources.

Philstar (2025) ‘Philippines poised to gain as nickel steadies, gold peaks in 2026’, 24 October.

Philstar.com (2026) ‘China grip on Philippine nickel cited as reason to back Pax Silica’, 10 August.

PhilSTAR Life (2026) ‘What exactly is Pax Silica, and why is it sparking environmental concern?’.

Politiko (2026) ‘Who authorized it? Makabayan seeks probe into PH role in US Pax Silica initiative’, 19 June.

Rappler (2026a) ‘What is Pax Silica? What are its goals, and what concerns does it raise?’.

Rappler (2026b) ‘Pax Silica: BCDA’s claims and the counterarguments’.

Rare Earth Mining (2026) ‘Philippines Rare Earth: Key Deposits & Strategic Role’.

US International Trade Administration (2025) Philippines Critical Minerals. Washington, DC: US Department of Commerce.

Vantage FDI (2025) The Philippines’ Untapped Mineral Wealth.

WRI (2026) Decarbonizing Indonesia’s Nickel Industry for Clean Energy. Washington, DC: World Resources Institute.

READING THE CURRENTS

The Philippines’ Strategic Window in the Energy and Critical Minerals Transition

Part II – Part I of this series looked at why the Philippines’ mineral base – nickel above all, but copper, cobalt, gold, and a real if still unproven rare earth potential alongside it – has become strategically relevant at the exact moment the Strait of Hormuz crisis is forcing a rethink of energy security worldwide, and at why Pax Silica, the new US-anchored coalition and its flagship hub at New Clark City, has turned that relevance into stated national policy rather than leaving it to individual firms to work out. It also set out the real concerns that project has drawn, and the specific, checkable claims on both sides. What follows is the other half of that picture – where the investment opportunity actually sits for firms and institutions of different sizes, and – just as important – what would have to change institutionally for any of it to add up to genuinely shared, climate-just development, rather than a faster version of the extraction the country already knows.

Where the Investment and Policy Opportunities Actually Sit

Setting any single mega-project aside, the same underlying forces – energy insecurity abroad, a national push to process minerals at home, buyers who increasingly discount goods made on dirty power – open a genuine set of opportunities, at very different scales and for very different kinds of investors. Those opportunities are sharpened further by a London Metal Exchange (LME) market increasingly structured around a formal low-carbon nickel category and a discoverable green premium for producers who meet it (Metalshub, 2026), and by the EU’s Carbon Border Adjustment Mechanism, under which ferronickel and nickel pig iron have been treated as CBAM-covered precursor materials requiring reported carbon-footprint data since October 2023, with certificate-purchase obligations phasing in from 2026 (Nickel Institute, 2023; Mining.com, 2026).

The clearest is becoming a long-term power partner to mineral processing itself, not merely a generator selling into the wholesale grid. Nickel Asia’s renewable arm built a joint venture with Shell aiming for close to a gigawatt of capacity by 2028, with its first major solar plant already supplying power under a fifteen-year contract (Inquirer Business, 2023; Tribune, 2026). Philex Mining has paired solar and battery storage with its own copper project for the same reason (BusinessWorld Online, 2023). This model – embedded generation, long-term offtake, solar-plus-storage built around a specific industrial customer rather than the general grid – is likely to be replicated well beyond mining as more processors and manufacturers face the same power constraint.

This model matters for more than commercial reasons. Part I noted that the carbon cost of Pax Silica’s onshore processing ambitions depends almost entirely on what powers the furnaces and autoclaves, not on the minerals themselves — Indonesia’s experience processing the same laterite ore type shows a fourfold difference in emissions intensity between coal-fired and hydropower-fed operations (IEEFA, 2024). Embedded renewable generation of the kind Nickel Asia and Philex are already building is precisely the mechanism that would keep Philippine processing on the low-carbon side of that gap rather than reproducing Sulawesi’s captive-coal model. The country’s geothermal base gives it a starting advantage Indonesia’s remote, grid-disconnected nickel belt never had. Whether that advantage becomes the default for New Clark City and the processing capacity built around it, or remains a handful of voluntary corporate initiatives running alongside a still largely fossil-fired grid, is not yet decided — which is exactly why it belongs on the list of things a binding framework agreement should settle rather than leave to individual firms’ discretion.

A second, closely related opportunity sits in the infrastructure around industrial development rather than the generation itself: substations, storage, water systems, transport connections, construction, and maintenance. This is where patient domestic capital, including cooperative capital, has a genuine advantage, because it does not need to chase the headline project to find a durable and useful position around it.

A third opportunity lies in manufacturing pieces of the renewable and industrial supply chain locally rather than importing them – racking, mounting structures, cabling, inverters, battery enclosures, and the fabrication and maintenance services that industrial development creates demand for. None of this requires the capital or complexity of a full component gigafactory, but a country with an established electronics and light-manufacturing base is well placed to localise at least some of it.

A fourth is the circular economy end of the business – aggregating and repurposing batteries and solar panels once they reach the end of their first useful life. Batteries retired from electric tricycles, jeepneys, and telecom towers often still hold 70 to 80 percent of their original capacity, more than enough for stationary storage at a fraction of the cost of new cells, and the country’s first wave of solar panels from the mid-2010s boom will begin reaching end of life within the next decade. No serious domestic industry has yet formed around collection, refurbishment, and material recovery, which means there is a real opportunity to build one ahead of the wave.

A fifth, broader opportunity is simply widening the lens beyond nickel when thinking about mineral-linked investment. Copper, cobalt, and gold each deserve consideration alongside nickel, and the more useful question is rarely “how do we get into mining,” but where Philippine capital and enterprise can occupy a defensible position somewhere in the value chain – in energy, processing, logistics, engineering, manufacturing, technology, or specialised finance.

Institutional Shifts That Would Make Any of This Genuinely Developmental

None of the opportunities above will translate into shared, climate-just development on their own. They will simply reproduce the extractive pattern the country already knows – value flowing out faster than capability builds in – unless they are matched by institutional changes on a comparable scale. This is the half of the conversation that gets far less attention than the investment case, and it deserves at least as much.

Human development has to move first, not last. A mineral-and-energy economy built on processing rather than raw extraction needs geologists, metallurgists, electrical and process engineers, and technicians in numbers the current education and training system is not yet producing, and building that pipeline through universities, technical institutes, and TESDA takes a decade of sustained public investment, not a training programme attached to one project. It also needs a public health system capable of managing the occupational and environmental exposure that comes with industrial-scale processing, in host communities that often start from a weaker baseline of health and education access than the country as a whole.

Labor and human resource policy need to catch up to a sector that has historically been under-regulated in practice even where the law is adequate on paper. That means enforceable occupational safety standards across mining, processing, and renewable energy alike; real protection and eventual formalisation for the informal and artisanal miners who work outside the large operations the headlines cover; portable, recognised certification so skilled workers are not trapped with a single employer; and a deliberate, gender-responsive effort to open technical trades that have historically excluded women.

Market regulation and public investment have to work together rather than in sequence. Fair, transparent, and genuinely open access to the grid, and to long-term power contracts, cannot depend on which company has the best relationship with a regulator; smaller renewable developers and cooperatives need the same standing to compete for industrial offtake that large conglomerates already have. That requires independent, adequately resourced regulators, and it requires public investment in transmission and distribution reaching the mineral-rich but often grid-poor regions – Palawan, Surigao, Zambales – where this entire opportunity is supposed to be built.

Fiscal policy is where a mineral windfall either becomes durable public capital or disappears into short-term consumption, and the Philippines has not yet decided which path it is on. A mining and minerals fiscal regime that rewards low-carbon in-country processing over raw export, transparent and enforceable revenue-sharing with the local government units and communities that host the activity, and serious consideration of a resource-revenue fund that converts a finite mineral endowment into a lasting source of financing for health, education, and climate adaptation, would all mark a genuine departure from how the sector has been managed for decades.

Industrial and trade policy need to stop treating each large investment as a one-off negotiation and start requiring, as a matter of standing policy, low-carbon, local-content, and technology-transfer commitments in joint ventures and foreign investment agreements, deliberate support for the downstream manufacturers who would supply and service this new industrial base, and enough diversification in trading partners that friend-shoring does not quietly become dependence on a single power bloc. Coordination across the Department of Trade and Industry, the Department of Energy, the Department of Environment and Natural Resources, and the Department of Finance also matters more than any single agency’s individual programme, since a strategy that is coherent in one ministry and contradicted in another will not hold.

Social policy, finally, is what determines whether this is a just transition or simply a new phase of an old story. That means social protection and transitional support for workers and communities disrupted by both the expansion of mining and processing and the shift away from diesel-based livelihoods; resettlement and benefit-sharing frameworks that meet independently verifiable standards rather than voluntary company pledges; and, given the country’s exposure to climate impacts on top of everything else discussed here, a deliberate insistence that the communities most vulnerable to both environmental cost and climate change end up net beneficiaries of this transition rather than the ones who absorb its risk while others capture its returns. Resolving the ancestral domain and land tenure disputes that keep resurfacing around every major project would do more to make all of the above possible than any single piece of investment promotion.

None of these six areas function in isolation, and treating them as a checklist to work through one at a time is itself a way of failing at all of them. A resource-revenue fund is only as good as the health and education systems able to absorb what it finances; local-content requirements mean little without the technical training institutions to supply the workers they mandate; grid investment stalls without a fiscal framework that prioritises transmission spending over competing demands; and social protection frameworks are only as credible as the labour and environmental enforcement standing behind them. This is not a hypothetical risk. It is close to the default outcome in the Philippines’ recent institutional history, where a policy that reads coherently within one department’s mandate is routinely undercut by inaction, underfunding, or outright contradiction in another’s. What determines whether an initiative like Pax Silica becomes a genuine template for the rest of the sector, rather than a one-off enclave with little bearing on how mining and processing are conducted elsewhere in the country, is not any single ministry’s programme. It is whether the National Economic and Development Authority, the Department of Trade and Industry, the Department of Energy, the Department of Environment and Natural Resources, the Department of Finance, the Department of Labor and Employment, and the local government units closest to the ground can be made to move as one system rather than seven separate ones – through standing coordination that outlasts a single administration’s attention, not a task force convened for one project and disbanded once the ribbon is cut.

Compliance Is Where Good Policy Usually Fails

Almost every safeguard described above already exists in some form on paper. The Philippines has an environmental impact assessment system, occupational safety and health laws, free and prior informed consent requirements for Indigenous ancestral domains, and mine rehabilitation fund requirements. What it has historically lacked is not the rulebook but the consistent capacity, and political will, to enforce it – and that gap matters more to how this transition actually unfolds than any single new policy would.

On environmental compliance, the core issue is monitoring capacity and independence rather than the adequacy of the standards themselves. Environmental impact assessments and rehabilitation fund requirements are only as credible as the agency verifying them, and the Department of Environment and Natural Resources and its regional offices are chronically under-resourced relative to the scale of activity they are meant to oversee. Independent, third-party environmental and water audits, with results published rather than held internally, would do more to settle disputes like the one already unfolding over the Sacobia watershed than any amount of reassurance from either side. The same applies to mine closure and rehabilitation: funds are routinely set aside in principle, but verifying that rehabilitation actually happens, on the timeline promised, requires monitoring capacity the government does not consistently have today.

On labour standards, the Philippines has ratified the core International Labour Organization conventions, but enforcement on the ground, particularly in remote mining and processing sites, remains uneven, and workers in smaller or informal operations often have little practical recourse. Strengthening the labour inspectorate’s reach into these sites, and giving Filipino workers a genuine channel to raise safety and wage concerns without risking their jobs, is not a glamorous policy ask, but it is the one that determines whether “decent work” is a phrase in a strategy document or something a worker actually experiences.

On the wider category of standards, there is a real opportunity in aligning domestic compliance with the certification and due-diligence requirements that buyers in the United States, the European Union, and elsewhere increasingly demand of their mineral suppliers. A domestic verification system credible enough to satisfy international carbon-intensity, power-source disclosure, and responsible-sourcing standards would let Philippine processors command a premium in exactly the markets this series has been describing, rather than treating compliance purely as a cost of doing business. Anti-corruption and procurement transparency belong in the same category: publishing the terms of major resource contracts, as several legislators have already demanded of Pax Silica specifically, is itself a compliance measure, since opacity in contracting is usually where environmental and labour standards quietly erode later.

None of this is a call for more legislation. It is a call for funding and empowering the institutions that already exist to do the job the law already asks of them, and for building the independent verification mechanisms that turn a government or company’s claim into something the public can actually check.

Why This Should Interest Cooperatives Specifically

A cooperative does not need to become a mining company, or even an energy conglomerate, to participate in the next phase of Philippine industrial development, and it may in fact be better off not trying to. What cooperatives bring that purely financial investors typically do not is an existing membership base, standing local relationships, community legitimacy, and the ability to mobilise patient capital that is not chasing a short exit. That does not make every industrial or energy opportunity suitable for cooperative investment; if anything, it means the screening needs to be more disciplined, not less. Any credible opportunity needs a reliable off-taker, reasonably predictable revenue, properly allocated risk, competent technical partners, a clear regulatory picture, and a business model that does not simply shift environmental and social costs onto surrounding communities.

The opportunity for a cooperative-scale investor is not necessarily to be the biggest player in the room. It may be to be early, and to identify the right niche before it becomes obvious to everyone else – and, given the institutional and compliance gaps described above, cooperatives are also among the few institutions positioned to advocate for those gaps to close, since they sit close enough to affected communities to see where a policy promise and a lived reality diverge.

A Sensible Starting Point

Rather than beginning with a specific project, it makes more sense to begin by mapping what is actually changing – which mineral-processing projects are likely to proceed, where reliable renewable power will be needed, what infrastructure gaps are emerging, what incentives government is putting in place, which companies will need local partners, and where Philippine enterprises and cooperatives might offer something that foreign capital alone cannot. A modest initial step – gathering intelligence, mapping likely partners, screening potential projects, and building a shortlist worth a proper feasibility assessment – costs comparatively little and keeps every option open.

The Philippines is unlikely to become a global minerals power simply by exporting more ore, and that probably should not be the ambition in any case. The more interesting possibility is becoming a considerably more capable participant in the value chains that its existing mineral resources can support. But capability is not only a matter of enterprise and capital. It is equally a matter of the education system, the labor protections, the regulatory institutions, the fiscal architecture, the social policies, and the enforcement capacity that decide who actually benefits when the value chain moves, and whether the standards written into law are the ones that actually govern what happens on the ground. The country already holds several of the necessary pieces: a genuinely diversified mineral base, substantial renewable energy potential, a strategic location, an educated workforce, and community institutions such as cooperatives that are well placed to connect outside investment with local economic participation. What is missing is not one enormous investment decision, but coordination – between capital and infrastructure, energy and industry, minerals and processing, technology and skills, policy and enforcement, and investment and the institutions and communities that will live with its consequences either way.

The currents are changing. The real question is whether the country, and the different institutions within it, patient enough to move deliberately, are prepared to read them – and to build the structures, and the compliance capacity behind them, capable of turning that reading into something genuinely shared – while the window is still open.

References

BusinessWorld Online (2023) ‘Nickel Asia board OKs nearly P3B more for RE unit’, 17 January.

IEEFA (2024) Indonesia’s Nickel Companies: The Need for Renewable Energy Amid Increasing Production. Sydney: Institute for Energy Economics and Financial Analysis, 24 October.

Inquirer Business (2023) ‘Nickel Asia, Shell tie-up eyes 650 MW of clean energy capacity by 2025’, 24 April.

Metalshub (2026) ‘Class 1 Nickel Trading Volumes on Metalshub’, Metalshub Blog.

Mining.com (2026) ‘Canadian nickel exporters eye EU carbon boost’, 14 January.

Nickel Institute (2023) ‘Ferronickel and NPI importers to the EU: get ready for the EU Carbon Border Adjustment Mechanism and its data collection and submission requirements’, Nickel Institute Blog, September.

Tribune (2026) ‘Nickel Asia, Shell JV secures P9.36-B funding for 240-MW San Isidro Leyte Solar Project’, 6 May.

Francis Perez

When Infrastructure Promises Collapse

And Their Corrosive Impact on the State

Renewable energy has been presented to Filipinos quite rightly as a response to several urgent and overlapping challenges: rising electricity prices, dependence on imported fuel, vulnerability to climate-related disasters, and persistent poverty. Solar and wind power, in particular, are framed as technologies that could democratise energy, create jobs, and strengthen national resilience.

These promises carry particular weight when viewed through the lens of climate justice—the expectation that climate action should reduce, rather than reproduce, existing inequalities, and that those least responsible for climate change should not bear the heaviest costs of response. A just energy transition follows from this logic. It is not only about shifting from fossil fuels to renewables, but about how that shift is financed, governed, and distributed: who benefits, who carries risk, and whether cleaner energy actually translates into affordable power and reduced vulnerability for ordinary households and communities.

It is in this context that the decision of the Department of Energy (DOE) in January 2026 to cancel a massive number of renewable energy service contracts—and to pursue roughly ₱24 billion in penalties and contractual obligations linked largely to one group of solar companies—takes on significance far beyond the energy sector.

This is not simply a story about a company that failed to deliver. It is a case study in how weaknesses in governance, oversight, and accountability can quietly drain public resources, weaken institutions, and undermine confidence in the country’s ability to manage highly technical infrastructure—whether in renewable energy, flood control, or other critical public systems such as water supply and national telecommunications. When this happens, it is the poorest and most vulnerable—those already facing climate shocks and high energy costs and those who are least able to cope—who ultimately bear the burden. In this sense, infrastructure failure becomes a climate justice issue.


A brief background and timeline

The rise of Solar Philippines
Founded in 2013, Solar Philippines rose rapidly during a period of strong policy support for renewable energy. It became one of the most visible developers of large-scale solar projects and positioned itself as a flagship of the country’s clean energy ambitions.

The grant of a national franchise (2019)
In 2019, Congress granted Solar Para sa Bayan Corporation a national franchise to develop and operate a distributed power system across the country. Such franchises are not routine. They confer extraordinary rights over critical infrastructure and are typically justified by demonstrated technical capacity, financial strength, and the ability to deliver power at scale in the public interest.

From the standpoint of a just energy transition, the granting of such a franchise represents a social contract: public authority and market privilege are extended on the expectation that real, timely benefits will accrue to consumers and communities. Questions were raised at the time—quietly but persistently—about whether a relatively young company had the institutional depth to meet such a critical need and high expectations. Those questions have become more pressing in hindsight.

Accumulation of service contracts and restructuring (2020–2023)
Between 2020 and 2023, Solar Philippines-linked entities accumulated a very large number of renewable energy service contracts under DOE programs, including the Green Energy Auction Program. These contracts granted exclusive rights to develop thousands of megawatts of capacity within defined timelines, backed by performance bonds and other contractual obligations.

During this period, assets were reorganised through listed vehicles such as SP New Energy Corporation (SPNEC), enabling capital entry and exit. Strategic investors—including ACEN Corporation and later Meralco-linked entities—acquired stakes through disclosed transactions. These developments are relevant not because these investors are accused of wrongdoing, but because they illustrate a deeper structural issue: climate-related finance and investment can move even when physical delivery and public benefit lag behind. When this happens, the promise of equitable climate financing—finance that is meant to deliver real social, developmental, and environmental outcomes—begins to erode.

Cancellations and enforcement (2024–2025; announced January 2026)
In 2024 and 2025, the DOE cancelled or accepted the relinquishment of nearly 17,900 megawatts of renewable energy service contracts nationwide. More than 11,000 megawatts—over 60 percent—were linked to Solar Philippines entities.

In January 2026, the DOE publicly announced that it was pursuing approximately ₱24 billion in penalties and contractual obligations related to these cancellations and that the matter had been referred to government legal offices for further action. Around the same time, the Office of the Ombudsman confirmed that it was examining alleged franchise-related violations involving a Solar Philippines firm.


Responsibility, finance, and public interest

Understanding this issue requires clarity about who is involved and in what capacity, because much of the public confusion stems from the overlapping—but not identical—roles of companies, regulators, investors, and political institutions. What follows is not a list of accusations, but a mapping of relationships in a complex governance and financing ecosystem.

Solar Philippines
Solar Philippines is a private renewable energy developer founded in 2013. It rose rapidly during a period of strong policy support for utility-scale solar and accumulated a large number of renewable energy service contracts issued by the Department of Energy (DOE). These contracts granted exclusive rights to develop solar projects within specific timelines, subject to performance requirements.

Solar Philippines did not require a congressional franchise to hold these contracts; its authority flowed primarily from executive-branch regulation. Over time, however, the sheer scale of contracts held by Solar Philippines–linked entities made the company central to national renewable energy planning, amplifying the public consequences of any failure to deliver.

Solar Para sa Bayan Corporation
Solar Para sa Bayan Corporation (SPBC) is a distinct corporate entity but is historically and strategically linked to Solar Philippines. Its defining feature is the national franchise granted by Congress in 2019, allowing it to develop and operate a distributed power system and sell electricity directly to end-users.

This franchise conferred public-utility–like privileges that go beyond ordinary project development. While SPBC and Solar Philippines are legally separate, they have long been understood—by policymakers, regulators, and the public—as part of the same corporate ecosystem pursuing complementary regulatory pathways: one through DOE service contracts, the other through congressional authority.

Leandro Leviste
Leandro Leviste is central to this story not because of personal allegations, but because of overlapping institutional roles. He is the founder and original public face of Solar Philippines and was closely associated with Solar Para sa Bayan at the time its franchise was granted. He is now a sitting member of the House of Representatives.

While franchises are granted to corporations rather than individuals, his leadership role and public association mean that questions about performance, delivery, and accountability inevitably reflect on him—particularly in a political economy where corporate identity and personal leadership are often closely intertwined. This overlap heightens the importance of transparency and institutional safeguards, even in the absence of any finding of wrongdoing.

SP New Energy Corporation
SP New Energy Corporation (SPNEC) emerged as a listed vehicle linked to Solar Philippines’ renewable energy assets. Through SPNEC, solar projects were aggregated, restructured, and opened to public investment. SPNEC later underwent ownership changes and has stated in official disclosures that it is not liable for penalties associated with Solar Philippines’ cancelled service contracts.

SPNEC’s role illustrates how financial instruments and listed entities can continue to function even as underlying project delivery encounters serious difficulty—a key issue in discussions of equitable climate financing and risk allocation.

ACEN (Ayala Group)
ACEN (Ayala Group), the renewable energy subsidiary of the Ayala Group, entered the picture as a strategic investor through disclosed transactions involving SPNEC. ACEN is not the subject of DOE penalty actions and is widely regarded as a technically capable and reputable renewable energy player.

Its involvement matters analytically because it demonstrates how large, credible capital can enter a project ecosystem after key public rights have already been allocated. This does not imply fault, but it complicates public understanding of responsibility and underscores the need for clear rules on how climate-related investments intersect with pre-existing regulatory obligations.

Meralco and Metro Pacific Investments
Meralco, the country’s largest power distribution utility, and Metro Pacific Investments Corporation (MPIC), a major infrastructure conglomerate, became relevant through later-stage corporate transactions and strategic positioning in the energy sector. Their involvement—directly or through affiliates—reinforced the perception that Solar Philippines–linked assets were being absorbed into the orbit of established power and infrastructure players.

Again, this does not suggest impropriety. But it highlights a structural issue: public-facing risks and obligations often remain with original developers or the state, while assets and opportunities can migrate toward larger, better-capitalised actors. For ordinary citizens, this dynamic contributes to confusion about who is accountable when projects fail.

Regulators, oversight bodies, and the public
The DOE is responsible for issuing, monitoring, and enforcing renewable energy service contracts. The Office of the Ombudsman examines potential administrative or legal issues involving public authority and public interest. Congress grants franchises and exercises oversight over the energy sector.

Finally, the public—especially electricity consumers and climate-vulnerable communities—bears the downstream consequences of failure: delayed power supply, lost public revenues, weakened state capacity, and diminished trust.


What went wrong? 

At its core, the problem is not complicated: power plants were promised but not built, at a scale large enough to disrupt national energy planning.

Service contracts are instruments through which the state allocates scarce development space and signals future supply. When a single group of companies holds a disproportionate share of those contracts and fails to deliver, the consequences extend well beyond that group.

Auction slots are locked up for years. Other capable developers—including smaller and more locally embedded actors—are crowded out. Energy supply projections must be revised. Consumers remain exposed to volatile prices and supply constraints.

From the standpoint of transformative adaptation, this represents a missed opportunity. Transformative adaptation requires more than incremental change; it involves reshaping systems and institutions so societies can cope with escalating climate risks in durable and inclusive ways. In the energy sector, this means diversifying actors, decentralising solutions, strengthening public learning institutions, and reducing systemic vulnerability. Large-scale non-delivery does the opposite: it reinforces concentration, fragility, and dependence on a narrow set of actors.

DOE officials have stated publicly that many projects failed to meet development milestones and did not adequately respond to notices issued by the department. Whatever the immediate causes—land access, financing constraints, technical limits, or over-extension—the outcome is the same: the public absorbs the cost.


Climate financing as a governance test

Climate finance is often discussed in terms of scale—how many billions are needed to fund energy transition and climate adaptation. But scale alone is not the core challenge. Governance is.

In principle, climate financing is meant to correct market failures, share risk, and enable transitions that would not otherwise occur—especially in countries facing fiscal constraints and high climate exposure. It is meant to support a just energy transition by lowering costs, broadening participation, and ensuring that climate action delivers tangible benefits to vulnerable groups.

What this case reveals, however, is how easily climate-related finance can become detached from those goals.

The accumulation of large renewable energy service contracts, followed by financial restructuring and capital transactions, created pathways for finance to move even as physical projects stalled. This does not automatically imply illegality. But it does point to a serious misalignment: finance responding to paper commitments rather than delivered infrastructure and public outcomes.

From the perspective of climate justice, this misalignment is deeply problematic. When climate finance rewards scale without delivery, it concentrates opportunity while socialising risk. Communities are left without power. Local governments lose expected revenues. The state loses fiscal and institutional space to invest in adaptation where it is most urgently needed.

Equitable climate financing cannot function under these conditions. It depends on strong public institutions capable of pacing investment, enforcing obligations, and ensuring that climate finance supports transformation rather than speculation.


The visible cost

The DOE’s estimate of roughly ₱24 billion reflects penalties, performance bonds, and contractual obligations associated with cancelled contracts. Whether this amount will be fully recovered remains uncertain and subject to legal processes.

But focusing only on this figure obscures a much larger cost—especially for a country seeking sustained access to climate finance for both mitigation and adaptation.


The even bigger hidden costs

The most serious damage caused by large-scale infrastructure failure is rarely captured in a single number.

Renewable energy projects that are not built do not pay local taxes, land rentals, or fees. They do not generate employment or secondary economic activity. For many local governments—particularly outside major urban centres—these revenues could have supported health services, disaster preparedness, and climate adaptation measures. Their absence deepens existing inequalities.

Renewable energy development requires sophisticated public systems: auction design, grid studies, contract management, and regulatory enforcement. When hundreds of projects collapse or stall, years of public investment in planning and oversight are effectively written off. Officials are diverted from learning and system improvement to managing disputes, litigation, and clean-up.

Following major failures, governments tighten rules. While necessary, this also raises transaction costs and slows future project development. More importantly, repeated failures undermine confidence among international climate funds, development partners, and responsible investors. The country’s credibility as a destination for equitable climate financing is weakened, just when long-term support is most needed.

Perhaps most damaging is the loss of trust. Investors become cautious. Financing costs rise. Citizens grow sceptical of government promises. This erosion of confidence weakens the social contract that underpins any credible just energy transition.

And a wider pattern

The renewable energy cancellations echo a broader and longer-running pattern visible in the country’s flood-control sector.

Over many years, tens of billions of pesos allocated for flood-control projects have been lost to substandard work, incomplete projects, or infrastructure that exists only on paper. These failures disproportionately affect poor and climate-exposed communities, turning what should be climate adaptation investments into sources of injustice and harm.

The connection between renewable energy and flood control is not technology—it is governance. In both cases, large sums of public money and climate-related financing were committed to technically complex infrastructure. In both cases, oversight proved insufficient to prevent large-scale non-delivery. And in both cases, the consequences extended far beyond individual projects: weakened institutions, drained budgets, and eroded public trust.

Of compounding effect

These failures do not occur in isolation. Flood vulnerability disrupts power systems. Weak energy systems slow economic recovery after disasters. Fiscal losses limit investment in both prevention and resilience.

In this way, infrastructure failures reinforce one another and amplify national vulnerability. They undermine the very conditions required for transformative adaptation—long-term planning, institutional learning, and inclusive decision-making.


A climate justice and development issue

Whether courts ultimately confirm wrongdoing in specific cases is important—but accountability matters even before legal outcomes are final.

Franchises, service contracts, and licenses are not private favours. They are instruments through which society entrusts private actors with public responsibilities tied to climate action and development. When those instruments can be accumulated, traded, and abandoned without proportionate consequence, the result is fragility, not progress.

From a climate justice perspective, weak accountability shifts the costs of failure onto those least able to bear them. From a development perspective, it corrodes the state’s capacity to govern.


Building a just transition

What, then, can be learned from this case—beyond memes and public accusations and counter accusations? Beyond immediate controversies and ongoing legal processes?

First, discipline in the allocation of public rights matters. Renewable energy service contracts and congressional franchises are not speculative instruments. They are public trusts. Granting them at scale without rigorous, ongoing verification of technical, financial, and organisational capacity invites failure—and shifts the cost of that failure onto the public.

Second, equitable climate financing requires strong state capacity. Climate finance is meant to correct market failures and support transitions that would not otherwise occur naturally or automatically. When governance is weak, however, climate-related finance can reward paper commitments rather than real delivery, concentrating benefits while socialising risks. This undermines both climate justice and long-term investor confidence.

Third, accountability must operate across institutions, not only through courts. Legal processes are essential, but they are slow and retrospective. Effective accountability also requires transparent disclosure, consistent enforcement of milestones, and credible consequences for non-delivery—regardless of political stature or corporate scale.

Fourth, transformative adaptation depends on institutional learning. Large-scale failures in renewable energy and flood-control infrastructure reveal the same underlying problem: the inability of public systems to learn, adapt, and correct course early. Without this capacity, climate responses remain reactive, fragmented, and unjust.

Finally, public trust is a form of national capital. When infrastructure promises collapse, trust erodes—not only in specific projects, but in the state’s ability to govern complex transitions. Rebuilding that trust requires more than new projects. It requires demonstrating that lessons have been learned, rules will be enforced, and public interest will prevail over short-term gain.

It is also important to be clear-eyed about expectations. While it is possible for private companies and investors to align with the aspirations of a just energy transition, equitable climate financing, transformative adaptation, and climate justice, it would be naïve to assume that these goals will naturally guide private decision-making. Private capital responds primarily to risk, return, and regulatory signals. The consistent pressure to ensure that climate action delivers fairness, inclusion, and long-term resilience has historically come not from markets alone, but from civil society, affected communities, and an informed public demanding more of both corporations and the state. It is this collective pressure that compels governments to craft development strategies, regulatory frameworks, and public investment priorities that are genuinely aligned with these broader ambitions.

There is, undoubtedly, much more to examine in the regulatory framework governing power generation in the Philippines—from market design and grid integration to pricing, competition, and system planning. A detailed assessment of these technical and legal dimensions, however, is not the primary aim of this piece. Rather, the analysis here is intended to underline a more fundamental point: that regulatory frameworks must be strengthened and applied consistently so they serve clearly articulated public goals as part of a whole-of-government, integrated, and coherent approach. These include sustainable development, climate justice, a just energy transition, equitable climate financing, and transformative adaptation—not merely the rapid scaling of capacity or the movement of capital.

A just energy transition, supported by equitable climate financing and oriented toward transformative adaptation, cannot be built on ambition alone. It rests on institutions that are credible, capable, and accountable. The real cost of failing to strengthen those institutions will not be measured only in pesos or megawatts, but in diminished capacity to protect the vulnerable and to lead the country through the intertwined crises of climate, energy, and inequality.

Without these guardrails, the energy transition risks becoming technically sound but socially hollow—delivering megawatts and financial returns while falling short of the justice, resilience, and transformation that climate action ultimately demands.

Author’s Note

This analysis is based on publicly available reporting, official statements, regulatory disclosures, and government announcements, including those issued by the Department of Energy in January 2026 and confirmations by the Office of the Ombudsman. Legal and investigative processes related to the matters discussed are ongoing. No findings of criminal liability are asserted in this piece. The purpose of the analysis is to examine governance, climate justice, equitable climate financing, and development implications in the public interest.