THE Russia-Ukraine crisis could encourage a surge of investment in renewable energy if the standoff causes further disruptions in the fuel market, where prices have been rising sharply, the Department of Trade and Industry (DTI) said.
Trade Undersecretary Ceferino S. Rodolfo said during a virtual forum organized by SN Aboitiz Power Group on Wednesday that renewable energy investment could be a major beneficiary of tensions in Eastern Europe, because renewables will become more viable the more fuel prices rise.
“I see an opportunity here as the economics for investing in renewable energy here in the Philippines might even be accelerated,” Mr. Rodolfo said.
“At the same time, it also presents more opportunities for more nearshoring of manufacturing so that we could present also the Philippines as a hub for supply chain dependent light manufacturing in our region,” he added.
The US, European Union, and UK imposed new sanctions against Russia following reports that more than 150,000 Russian troops are gathered near Ukraine’s borders, threatening invasion.
According to Mr. Rodolfo, the Philippines is “reasonably vulnerable” from the impact of a Ukraine-Russia conflict because of the potential for fuel prices to rise.
“I suppose we are not any more vulnerable than other countries in general. Except, for example, if you are really adjacent to Russia or Ukraine. We are reasonably vulnerable, particularly because of fuel price increases and because we are very much reliant on imported fuel,” Mr. Rodolfo said.
Since the beginning of the year, gasoline prices in the Philippines have increased a net P8.75 per liter. Diesel increased by P10.85, while kerosene rose P9.55.
Separately, Trade Secretary Ramon M. Lopez told reporters via Viber that the DTI is still studying the potential economic effects of a Ukraine-Russia conflict.
“Offhand, less direct impact given our small trade with Ukraine, only around $200 million, 40th ranked trading partner,” Mr. Lopez said.
He added that the country’s trade with Russia was around $2 billion, mainly wheat, oil, iron and steel products, electronics, and agricultural products.
Mr. Lopez said the main sources of disruption are logistical in nature.
The real worry is “disruption in the prices and supply chain of oil and key commodities like wheat, iron ore, and the high degree of uncertainty if the crisis worsens. These are the factors that can impact global recovery efforts,” Mr. Lopez said. — Revin Mikhael D. Ochave
