Philippines DOE Revised Omnibus Guidelines on RE Contracts (DC2024-06-0018) — opens solar, wind, biomass, ocean RE to 100% foreign ownership

Mechanism

The Philippines' 1987 Constitution (Article XII, §2) reserves "exploration, development and utilization" of natural resources to the State and limits co-production / joint-venture / production-sharing agreements with private parties to citizens or 60% Filipino-owned corporations. Renewable-energy service contracts issued under the 2008 Renewable Energy Act (RA 9513) were historically read into that 60-40 cap, blocking foreign-controlled developers from taking RE Service Contracts in their own name.

In November 2022 the DOE under Secretary Lotilla issued DC2022-11-0034, a reinterpretation arguing that solar, wind, biomass and ocean/tidal resources are inexhaustible and therefore fall outside the constitutional category of "inalienable lands of the public domain" that triggers the 60-40 cap. That reinterpretation was contested but never enjoined; DC2024-06-0018 is the operational circular that re-bakes the entire RE Service Contract award and registration process around the new nationality rule.

Three substantive shifts:

1. Eligibility (§II/§III): "any person, whether Filipino or foreigner, may apply for RE Contracts" for solar, wind, biomass and ocean resources. Geothermal stays at 60-40. This converts a hard FDI cap into a sector-specific carve-out and matches the treatment of mining service contracts under the Financial and Technical Assistance Agreement (FTAA) regime. 2. Pre-contract activities: developers can run feasibility, environmental and permitting workstreams before the 25-year service contract clock starts, reducing dead-capital exposure during the long Philippine permitting cycle. 3. Conversion path: existing service contracts under the older regime can be converted into RE Contracts under the new framework, enabling foreign sponsors already operating through Filipino-majority JVs to restructure into 100%-owned vehicles.

The DOE RE pipeline at the time of issuance contained roughly 1,400 RE service contracts representing ~154 GW of solar, wind, biomass and ocean capacity in various pre-COD stages. Wholly-foreign-owned sponsors that had pre-positioned through the 2022 reinterpretation — Masdar (UAE), Mainstream Renewable Power (Norway/Japan), Acciona (Spain), Copenhagen Infrastructure Partners (Denmark), Vena Energy (Singapore) — now have a settled procedural framework to take contracts directly without 60-40 partners.

Downstream implications

• Materially eases foreign-capital flow into Philippine RE; reinforces the

Marcos administration's "Trabaho at Negosyo" (jobs and business) plank and the Tatak Pinoy / CREATE MORE / PPP-Code-IRR investment-regime stack already filed.

• Re-frames the constitutional debate: future legal challenges to DC2022-11-0034

will now have to overturn an operational regime, not just a memo. The political cost of reversal rises with each RE Service Contract granted to a 100%-foreign-owned sponsor.

• Likely raises Philippine renewable-capex throughput (currently lagging the

35%-by-2030 / 50%-by-2040 Philippine Energy Plan targets) by removing the largest structural FDI bottleneck.

• Asymmetric for China: Chinese SOE developers had been active under JV

structures but face higher implicit screening risk under the broader US-aligned Marcos-administration FDI architecture (US-Philippines critical minerals MoU, EDCA expansion). The unlock benefits Gulf, European, Japanese and US-aligned Asian sponsors disproportionately.

Open questions

• Pending Supreme Court challenges to the underlying constitutional

reinterpretation — none of the petitions filed against DC2022-11-0034 have produced a TRO, but a ruling against the reinterpretation would unwind both circulars.

• Coverage of offshore wind under "wind" — DOE has separately issued offshore

wind-specific guidance; whether DC2024-06-0018 fully governs offshore wind service contracts or only onshore wind remains worth a follow-up filing.

• Treatment of hydropower: not enumerated explicitly in the 100%-foreign-ownership

list; appears to remain in a separate hydropower regime under the Water Code.