Indonesia assures Philippines it will honour coal supply contracts
Manila has also sought stable export prices as Indonesia moves to centralise commodity exports and give priority to domestic demand.
Indonesia has told the Philippines it will fulfil existing coal supply agreements despite changes to its commodity export arrangements, according to the Philippine Department of Energy (DOE). Energy Secretary Sharon Garin relayed the assurance to reporters during Singapore International Energy Week.
Indonesia is moving to centralise exports of key commodities while prioritising domestic needs. Garin said the DOE had also requested that Indonesia avoid raising coal export prices as energy trade controls tighten. She cautioned that the supply assurances did not remove all risks, because contracts could include force majeure clauses that might be invoked in certain circumstances.
Around 60 per cent of the Philippines’ energy mix comes from coal. Imports provide about 95 per cent of its coal supply, with Indonesia supplying most of those imports.
The Philippines is exploring a proposal for its first coal terminal to lessen dependence on Indonesian supplies. The facility would process and blend domestic coal to suit local industries’ requirements. Garin said the DOE had been presenting the proposal to Philippine and overseas companies to gauge their interest in participating.
