Biofuels as strategic energy asset

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April 9, 2026 | 12:00am

The latest escalation of tensions in the Middle East has once again exposed an uncomfortable reality for the Philippines: as a country that imports the vast majority of its oil, we remain highly vulnerable to global shocks beyond our control. 

Even conflicts thousands of miles away quickly find their way into Filipino homes, resulting in higher pump prices, rising transport costs and inflationary pressures. Latest data from the Philippine Statistics Authority show that inflation nearly doubled to 4.1 percent in March, its fastest pace since July 2024. Fuel prices have been a major driver – diesel inflation surged to 59.5 percent, while gasoline inflation climbed to 27.3 percent.

After yet another round of significant fuel price hikes this week, diesel prices are now hovering at a historic P170 per liter threshold, while gasoline prices are now at P120 per liter. For many households already stretched by rising food and utility costs, the margin for absorbing another shock is fast disappearing.

This crisis is a reminder that while we cannot control global conflicts or volatility of international markets, we can take steps to cushion the impact and, over time, insulate our country from such uncertainty. One strategic opportunity we have is to strengthen and promote the local biofuel industry. By promoting biofuels, we can somehow ease the burden of rising fuel costs and help build a stronger infrastructure for our long-term energy security.

The use of biofuels in the Philippines is not new. In fact, it has been a national policy for nearly two decades under the Biofuels Act of 2006. The law requires petroleum companies to blend locally produced biofuels into conventional fuel products — bioethanol in gasoline and biodiesel in diesel — with a clear dual purpose: to reduce the country’s dependence on imported oil and to strengthen key domestic industries, most notably the coconut sector that supports millions of Filipino farmers.

This framework was deliberately designed to shield the Philippines from the volatility and supply shocks of the global oil market. In that sense, today’s crisis should serve as a wake?up call — not to abandon the Biofuels Act, but to strengthen its implementation. Doing so would reduce the country’s exposure to unpredictable global prices while reinforcing energy resilience at home.

From a sustainability standpoint, biofuels offer clear and practical advantages. They can reduce greenhouse gas emissions by up to 65 percent compared with conventional fossil fuels, while also improving engine lubricity, helping engines last longer and run more efficiently. 

Likewise, the development of biofuels carries economic promise, particularly for rural communities. Expanding biofuel production creates stable, long?term markets for agricultural products, directly boosting incomes and strengthening purchasing power and local economies. In a country where agriculture still supports millions of livelihoods, this linkage between energy and rural development should not be underestimated.

That said, scaling up local biofuel production is easier said than done. Government cannot just set blending targets and hope that compliance will follow. Effective implementation requires active regulation, infrastructure support and sustained coordination with the private sector. I believe that one of the most effective ways to accelerate this is through well?structured public?private partnerships.

To draw in the investment needed, the government must do its part by setting clear, consistent rules and stand firmly behind them. Investors need certainty before committing capital, just as producers need confidence to expand, farmers need assurance to diversify crops and consumers need to trust that biofuels meet quality and performance standards. This means regulators must not only set blending mandates but also ensure they are properly enforced. 

Industry players say the country is in a position to do more. According to reports, The Philippine Biodiesel Association (TPBA) has indicated that local producers are ready to raise the biodiesel blend to as much as seven percent to help cushion Filipinos from further spikes in imported fuel. 

“Given RA 9367’s multiplier benefits — from fortifying the local coconut industry, to increased mileage and proven emissions reduction — we call for the continued implementation of the blending mandate and to maintain local sourcing of biofuels, which supports millions of coconut farmers who form this country’s backbone,” TPBA executive director Ramon Taniola was quoted as saying.

TPBA pointed out that blended diesel is often at parity with, and in some cases even cheaper than pure diesel. Motorists also directly benefit from improved fuel efficiency, TPBA estimates translates to P17 billion to P32.6 billion in net annual savings.

Biofuels should not be seen simply as a temporary fix to the current Middle East crisis. They are part of a bigger story — one about building long?term stability and strengthening our energy security. It is true that biofuels alone will not solve all of the country’s energy challenges, but they form an important foundation that can work alongside programs on renewables, electrification and energy efficiency.

The ongoing turmoil in the Middle East continues to disrupt supply chains and lay bare the risks of relying too heavily on imported fuel. At the same time, it gives the Philippines a chance to pause and rethink how we power our economy — by investing more intentionally in solutions that are homegrown, resilient and inclusive.

My hope now is that we do not let this moment slip by. Biofuels are not an abstract idea or an untested experiment. They are a technology we are actually already producing — one we understand and have the ability to scale. With the right policies and partnerships in place, biofuels can go beyond serving as an emergency buffer and become a strategic asset that Filipinos can utilize for many generations to come.