The use of biofuels for transport is a major thrust of the Philippines to reduce the country's dependence on imported fossil fuels and to mitigate greenhouse gas emissions. To pursue this objective, the government is implementing the National Biofuels Program to promote investments in biofuel productions and encourage the utilization of this product. Other activities that coincide with this program are the establishment of support mechanisms to ensure adequate supply of feedstocks and the adoption of appropriate technology for vehicles/engines to be able to use alternative fuels.

At present, bioethanol is mainly produced by sugar fermentation and distillation process. This activity started when both Leyte Agri Corporation and San Carlos Bioenergy, Inc. commenced operations in 2008.

Market Opportunity Huge and increasing demand
  • The Biofuels Act of 2006 created a market for bioethanol because of the mandate for oil companies to blend 5% bioethanol by volume in 2009 increasing to at least 10% in 2011 on all gasoline fuel products distributed and sold in the Philippines
  • current annual capacity: only 79 million liters in contrast to the demand of more than 400 million liters for 2011
Demand-Supply gap (in liters)
Year Blend Total Demand* (B) Total Installed Capacity** (A) Surplus/[Deficit] (A-B)
2010 5% 191,800,000 19,800,000 [172,000,000]
2011 a 5% 200,000,000 80,000,000 [120,000,000]
2011 b 10% 400,000,000 80,000,000 [320,000,000]
*Based on DOE demand estimate for bioethanol **For 2010, volume was computed based on the actual production of bioethanol companies. For 2011, volume was computerd based on the submitted annual capacities of BOI and DOE-registered bioethanol companies (San Carlos Bioenergy, Inc., Leyte Agri Corp. and Roxol Bioenergy Corp.
  • At present, capacity of existing bioethanol producers cannot meet the domestic demand based on the mandated blend of the law thus, the need for additional investments.
Big volume of imports
  • The existing bioethanol plants still cannot fully supply the requirements for the 5% blend mandated by the law; thus, oil companies resort to importation of bioethanol to meet the requirement.