Special Report On Renewal Energy In The Philippines.

Featured firm: SyCip Salazar Hernandez & Gatmaitan (SyCipLaw) 
Interviewees: Jose Florante M. Pamfilo, Mark Xavier D. Oyales  

Legal & Regulatory Framework  

• CL: What is the current regulatory framework for renewable energy in the Philippines?  

SyCipLaw: The renewable energy (“RE”) industry in the Philippines is primarily governed by the 1987 Philippine Constitution (“Philippine Constitution”), Republic Act No. 9136 or the Electric Power Industry Reform Act (“EPIRA”), and Republic Act No. 9513, otherwise known as the Renewable Energy Act of 2008 (“RE Act”).  

The Philippine Constitution establishes the foundational framework that natural resources (including all forces of potential energy) are owned by the State and that the exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. These activities as a rule, may only be undertaken through co-production, joint venture, or production-sharing agreements with Filipino citizens or corporations at least 60% Filipino‑owned. Recent regulatory interpretations, however, have clarified that renewable energy resources such as solar, wind, biomass, and ocean/tidal energy do not constitute “natural resources” for purposes of these constitutional ownership restrictions. 

In 2001, the enactment of EPIRA ushered in a far‑reaching reform of the Philippine power industry. The law unbundled the generation, transmission, and distribution sectors, permitting limited cross‑ownership between generation and distribution activities, and established an independent regulatory body, the Energy Regulatory Commission (“ERC”), to oversee market operations and ensure fair and transparent competition. 

On the other hand, the RE Act, which was enacted in 2008, aims to accelerate the exploration, development, and utilization of renewable energy resources in the Philippines. By advancing sustainable energy strategies, the law seeks to enhance energy self-reliance and reduce dependence on imported fossil fuels, thereby minimizing exposure to global price fluctuations and mitigating environmental impacts. The key features of the RE Act include: 

1. Incentives for RE developers, including income tax holidays, duty-free importation of RE machinery, equipment, and materials, and a zero percent value-added tax rate on the sale of power or fuel generated from RE sources. 

2. The establishment of the Renewable Portfolio Standards (“RPS”), a market-based policy that obligates electricity suppliers to source a minimum portion of their supply from eligible renewable energy resources, thus stimulating the growth of the RE industry. 

3. The creation of a Renewable Energy Market, which facilitates the issuance, trading, and retirement of RE certificates and enables mandated participants to demonstrate compliance with annual RPS requirements. 

4. The Green Energy Option Program (“GEOP”), which allows qualified electricity consumers to choose to source their power requirements from renewable energy resources. 

5. The feed-in tariff (“FIT”) system, which provides guaranteed fixed tariff rates and priority grid dispatch for eligible RE developers, such as those in solar, wind, biomass, and run-of-river hydro. Building on the success of the FIT system, the Department of Energy has since implemented the Green Energy Auction Program (“GEA Program”) to competitively procure additional renewable energy capacity. 

• CL: How does the Energy Virtual One-Stop Shop (EVOSS) streamline RE project permitting?  

SyCipLaw: A major challenge for RE developers is the fragmented permitting process, where multiple agencies impose different requirements and interdependent workflows. The Energy Virtual One‑Stop Shop (“EVOSS”) addresses this issue by replacing the traditional sequential, paper‑based system with a synchronized, fully digital, and interconnected platform for processing energy project applications. 

“EVOSS significantly cuts through bureaucratic “red tape” and expedites the development of RE projects”.

The EVOSS, created under Republic Act No. 11234 (“EVOSS Law”), serves as a centralized online platform that streamlines the otherwise complex and fragmented permitting process for energy projects in the Philippines. By integrating the requirements and approval workflows of multiple government agencies into a single digital system, EVOSS significantly cuts through bureaucratic “red tape” and expedites the development of RE projects. 

The key features of the EVOSS are as follows: 

1. It consolidates the requirements and approval processes of numerous government agencies into one unified online portal. Through this platform, project proponents can: (i) submit all documentary requirements, (ii) pay the necessary processing fees, and (iii) monitor the status of their applications in real time. This eliminates the need to physically visit multiple offices, reducing administrative burden and minimizing delays. 

2. The EVOSS Law also imposes strict, non‑extendible deadlines for each agency to act on applications. Importantly, if an agency fails to issue a decision within its prescribed period, the application is “deemed approved”—provided that the applicant has submitted all required documents. This statutory safeguard reduces uncertainty and discourages administrative inaction, offering developers a more reliable permitting environment. 

Despite these advancements, challenges remain in fully operationalizing EVOSS. Since its rollout in July 2020, several processes have yet to be integrated into the system. As of March 2025, the DOE had incorporated only 55 out of 103 identified energy‑related processes, leaving nearly half still outside the platform. In addition, many local government units (“LGUs”), whose permits are critical for project development, have not yet been integrated into EVOSS, and their offline processes continue to pose bottlenecks for RE developers. 

• CL: What are the recent changes or pending legislation affecting RE development?  

SyCipLaw: In June 2024, the Department of Energy (“DOE”) issued Department Circular No. DC 2024-06-0018 or the Revised Omnibus Guidelines Governing the Award and Administration of Renewable Energy Contracts and the Registration of Renewable Energy Developers (the “Revised Omnibus RE Guidelines”). The Revised Omnibus RE Guidelines integrate the DOE’s existing issuances and recent policies for an effective and efficient award and administration of RE contracts and registration of RE developers. Its key provisions include the following: 

1. the removal of the 60% Filipino ownership requirement in the award of RE contracts (as will be further discussed in the responses to other questions below); 

2. the introduction of an instrument called the Certificate of Authority (“COA”), which would allow RE developers to procure the necessary permits and tenurial instruments and to conduct reconnaissance and other activities for pre-feasibility activities within the area specified in the certificate, outside the 25-year term of the RE contract. The term of the COA is one to three years, depending on the RE technology involved. 

3. the requirement to obtain the DOE’s prior written approval in case of any sale or acquisition of shares or other capital, or a series thereof, that results in a change of control over an RE developer. 

• CL: How does the Build-Operate-Transfer (BOT) Law apply to renewable energy projects?  
   

SyCipLaw: The Public-Private Partnership (“PPP”) Code of the Philippines (Republic Act No. 11966) (“PPP Code”) and its Implementing Rules and Regulations (“PPP Code IRR”) prescribe the framework governing the financing, construction, design, operation, and maintenance of infrastructure or development projects and services through private sector participation. 

Infrastructure or development projects and services may include, among others, renewable energy projects. However, the PPP Code IRR provides that the PPP Code and the PPP Code IRR shall not apply to renewable energy service or operating contracts awarded pursuant to RE Act. However, if the RE project or RE service or operating contract is bundled as a component of a PPP Project, such shall be considered a PPP and therefore subject to the provisions of the PPP Code and the PPP Code IRR. This distinction is particularly relevant where the renewable energy activity is integrated into the rehabilitation, upgrading, or operation of existing government‑owned infrastructure. 

While the Philippine power industry is, as a general matter, largely privatized, the government continues to own and control several strategic generation assets, particularly large hydroelectric facilities. In this context, the PPP framework is frequently utilized for the rehabilitation, upgrading, operation, and maintenance of these assets, allowing the government to retain ownership while engaging private sector partners to enhance efficiency, performance, and sustainability. 

A notable example of such a PPP structure is the Agus‑Pulangui Hydroelectric Power Complex Rehabilitation and Joint Venture Project. In this project, a private consortium has proposed to enter into an unincorporated or contractual joint venture with the Power Sector Assets and Liabilities Management Corporation (PSALM) for the rehabilitation, operation, and maintenance of the Agus‑Pulangui Hydroelectric Power Complex. The scope of the project includes the development, design, construction, rehabilitation, upgrading, operation, and maintenance of the Complex, as well as its associated equipment, facilities, and systems, within a PPP framework. 

Similarly, the Philippine National Oil Company (“PNOC”) has initiated a solicited tender for the repurposing of the existing PNOC Port in Mabini, Batangas into an Offshore Wind Integration Port (“OSWIP”). The OSWIP is intended to serve as a critical support facility for offshore wind development in the Batangas or Mindoro areas, illustrating how the PPP framework may also be used to advance renewable energy‑related infrastructure when such projects are integrated into broader public infrastructure development initiatives. 

Compliance, Risk & Litigation 

• CL: What are the common compliance pitfalls for RE developers?  

“Grid access continues to be one of the most persistent challenges for RE developers. Projects are often premised on the assumption that transmission or interconnection facilities will be readily available or easily upgraded, an assumption that may not hold in practice”.

SyCipLaw: Renewable energy projects in the Philippines operate within a complex, multi‑layered regulatory framework involving national government agencies, LGUs, and environmental regulators. In practice, the most common compliance challenges do not arise from the absence of a single permit, but from misalignment across multiple regulatory requirements, including land tenure, environmental approvals, grid interconnection, local permitting, and incentive compliance. 

1. A recurring and critical pitfall for renewable energy (“RE”) developers is proceeding with project development without fully secured and defensible land rights. Common issues include incomplete or informal lease arrangements, overlapping land classifications (e.g., private land versus timberland or protected areas), and competing claims from landowners or local occupants. Additional layers of complexity arise when the project site is classified as agricultural land, which typically requires land-use conversion and formal reclassification. In projects affecting ancestral domains, failure to obtain Free and Prior Informed Consent from Indigenous Peoples/Indigenous Cultural Communities can delay or invalidate the project altogether. These land-related deficiencies often emerge only during environmental permitting, financial due diligence, or lender review, leading to costly delays or the need to restructure the project. 

2. Even where national-level approvals have been secured, compliance with LGU requirements remains essential. Developers frequently encounter delays or resistance arising from zoning disputes, changes in LGU leadership or priorities, or inadequate engagement at the barangay or municipal level. RE developers are often unaware that certain projects require formal endorsement by the relevant local legislative councils (sanggunian), often at two or three LGU levels. Moreover, inconsistent interpretations of local land-use plans, endorsement requirements, or permit renewal conditions can effectively halt construction activities, notwithstanding otherwise complete regulatory approvals. 

3. Grid access continues to be one of the most persistent challenges for RE developers. Projects are often premised on the assumption that transmission or interconnection facilities will be readily available or easily upgraded, an assumption that may not hold in practice. Delays in approvals, unanticipated grid upgrade requirements, or coordination issues with grid operators can materially affect project timelines and commercial viability.  

• CL: How are disputes in RE projects typically resolved? Discuss arbitration trends, contract enforcement, and cross-border issues. 

SyCipLaw: The dispute resolution mechanism under service contracts executed between the DOE and renewable energy developers, such as Solar Energy Operating Contracts and Wind Energy Service Contracts, is primarily arbitration‑based. These contracts generally provide that disputes which cannot be resolved amicably shall be submitted to arbitration, most often conducted in accordance with the ICC Rules of Arbitration. 

Arbitration likewise predominates as the dispute resolution mechanism in renewable energy project agreements, including engineering, procurement, and construction (“EPC”) contracts and operations and maintenance (“O&M”) agreements. Many Philippine renewable energy projects adopt international arbitration rules, such as those of SIAC, HKIAC, or the ICC, even where the governing law of the contract is Philippine law. This practice is driven by the preference for a neutral forum, particularly where government entities or regulated utilities are involved, as well as the technical and specialized nature of disputes arising from renewable energy projects. 

• CL: How do renewable energy laws intersect with environmental, labor, and corporate law?  

“Renewable energy laws also intersect with corporate and investment law, as most Philippine RE projects are implemented through special purpose vehicles. These projects must comply with corporate registration, governance, and capitalization requirements under Philippine law”.

SyCipLaw: RE laws do not operate in isolation. In practice, they intersect closely with environmental, labor, and corporate law, all of which play a critical role in the development and implementation of renewable energy projects. 

While RE laws primarily serve to promote and incentivize renewable energy development, environmental law ultimately determines whether and how a project can proceed. Renewable energy projects are subject to the Environmental Impact Statement (“EIS”) System under Presidential Decree No. 1586. Accordingly, even RE projects expressly promoted under RA 9513, including solar, wind, hydro, biomass, and geothermal projects, are required to secure an Environmental Compliance Certificate (“ECC”), along with other environment-related permits that may apply to specific project facilities or locations. Recently issued regulations created a more stringent environmental impact assessment framework for floating photovoltaic (“FPV”) projects, considering that the installation, operation and decommissioning of FPVs can have significant environmental impact. 

Renewable energy laws also intersect with corporate and investment law, as most Philippine RE projects are implemented through special purpose vehicles. These projects must comply with corporate registration, governance, and capitalization requirements under Philippine law. Moreover, although the renewable energy sector has been largely liberalized, certain activities associated with RE projects—such as land ownership or the acquisition of tenurial instruments—remain subject to constitutional or statutory foreign ownership restrictions. As a result, corporate structuring and compliance with foreign investment rules are essential to the viability of RE projects. 

Finally, renewable energy projects intersect with labor law, as they involve multiple labor phases, including development, construction, and operations. Each phase is regulated by Philippine labor laws governing employment standards, worker protections, and occupational safety and health. Workers engaged in renewable energy projects are entitled to full statutory labor protections, regardless of the project’s “green” or sustainable nature. There is also a set of safety standards and protocols specific to renewable energy projects. These standards cover various aspects, such as equipment installation, operation procedures, and emergency response protocols, to ensure the safety of workers and the surrounding community. It also aims to protect the health of workers and nearby residents.  

Emerging Trends & Future Legal Questions 

• CL: How is the legal landscape adapting to distributed generation and rooftop solar? 
   

SyCipLaw: In the Philippines, the regulation of Distributed Energy Resources (“DERs”), including rooftop solar systems, has progressed toward formal recognition, although the regulatory framework remains largely transitional. A significant milestone is the issuance of the ERC Distributed Energy Resources Rules under ERC Resolution No. 11, Series of 2022 (“DER Rules”). The DER Rules expressly define DERs as power sources connected to the distribution system or to end-user facilities, whether operating individually or in aggregated form. 

Under the DER Rules, electricity end‑users who install renewable energy systems primarily for their own use are permitted to export excess electricity to their distribution utilities in exchange for bill credits. The framework accommodates renewable energy systems with capacities ranging from 100 kW up to 1 MW for export of excess power, thereby extending regulatory recognition beyond small rooftop installations. In addition, the DER Rules cover systems below 1 MW connected to off‑grid distribution utilities, which is particularly relevant for end‑users in off‑grid or underserved areas. 

The DER Rules are also relatively flexible with respect to ownership and operational arrangements, recognizing multiple legal and commercial structures. These include: (i) user‑owned systems, where the end‑user owns the renewable energy equipment and holds the corresponding Certificate of Compliance (“COC”); (ii) third‑party‑owned arrangements, such as power purchase agreements or lease models, where an installer or service provider owns the equipment installed on the end‑user’s premises and sells electricity to the end‑user, in which case the COC is issued to the equipment owner or operator rather than the building owner; and (iii) O&M‑based structures, where ownership and operational responsibilities are separated, and the COC holder depends on the specific allocation of responsibilities under the relevant contracts. 

Notwithstanding these advances, the DER Rules generally require DER owners or operators to secure a COC from the ERC prior to operation. While this requirement enhances regulatory oversight and system reliability, it may pose a practical burden for residential consumers and small end‑users with relatively modest renewable energy installations, highlighting ongoing tension between regulatory control and ease of DER adoption. 

• CL: What legal issues surround battery storage and hybrid systems?  
   

SyCipLaw: By 2026, the Philippine legal framework for Energy Storage Systems (“ESS”) has evolved from treating storage as an optional, grid‑support measure to recognizing it as a mandatory infrastructure component for large‑scale variable RE projects. All proposed variable RE power plants with an installed capacity of 10 MW and above are now required to integrate an ESS with a minimum capacity equivalent to 20% of the plant’s installed capacity. 

The required ESS capacity, however, may be adjusted based on the results of the applicable System Impact Study (“SIS”) or Distribution Impact Study (“DIS”). Where the SIS or DIS determines that the integration of an ESS would adversely affect the stability or reliability of the transmission or distribution network, the System Operator or Network Service Provider may recommend a derogation or modification of the ESS requirement, which shall be expressly reflected in the SIS or DIS findings. 

In addition, power plants may voluntarily install ESS to enable participation in the available markets under the Electric Power Industry, subject to existing laws, rules, and regulations, including the necessary certifications and approvals from the System Operator. Provided, however, that the integration of an ESS shall not increase the registered capacity or net generation output of the host facility. The coordinated operation of the power plant and the ESS must also take into account cost‑effective charging and discharging strategies, consistent with system efficiency and grid reliability objectives. 

• CL: How do climate change goals and international treaties affect local RE policy?  

“In 2024, the government released the updated Philippine Energy Plan (“PEP”) 2023–2040, which operationalizes the country’s climate ambitions within the energy sector. The updated PEP reduces reliance on coal and fossil gas relative to previous planning frameworks and sets more aggressive renewable energy targets (…)”

SyCipLaw: The Philippines is a party to the Paris Agreement, under which countries articulate their climate commitments through Nationally Determined Contributions (“NDCs”), national pledges that outline efforts to reduce greenhouse gas emissions and strengthen resilience to climate impacts. The Philippines submitted its Nationally Determined Contribution in 2021. The country commits to a projected emissions reduction and avoidance of 75%, of which 2.71% is unconditional and 72.29% is conditional, representing the country’s ambition for emissions mitigation for the period 2020 to 2030.  

In 2024, the government released the updated Philippine Energy Plan (“PEP”) 2023–2040, which operationalizes the country’s climate ambitions within the energy sector. The updated PEP reduces reliance on coal and fossil gas relative to previous planning frameworks and sets more aggressive renewable energy targets, at least 35% renewable share in power generation by 2030, increasing to 50% by 2040, and more than 50% in 2050. These targets align domestic energy planning with the Philippines’ international climate commitments and provide a clear policy signal to investors, utilities, and corporations. 

The DOE also recently issued Department Circular No. DC 2025-09-0018 (General Framework for Carbon Credits in the Energy Sector). It provides for, among others: principles governing carbon credit certificates; mitigation activities that are eligible to generate carbon credits; allocation of carbon rights (i.e., legal entitlement to the benefits derived from emission reductions or emission removals); and recognition of various carbon trading markets (i.e., international compliance market; domestic compliance market; and voluntary carbon market). It aims to, among others, ensure alignment with the operationalization of engagements under Article 6 of the Paris Agreement. 

• CL: What’s the role of LGUs and how do local ordinances impact RE projects? Discuss zoning, permitting delays, and devolved regulatory powers. 

SyCipLaw: LGUs play a critical role in the implementation of RE projects in the Philippines. While national agencies issue service contracts and set overall energy policy, developers must still comply with local zoning regulations, permitting requirements, and other devolved regulatory powers under the Local Government Code (“LGC”). Under Section 27 of the Code, no project or program may be implemented by any government agency without prior consultations and the approval of the concerned sanggunian. Consequently, a resolution of support from the relevant LGU is a prerequisite before an RE developer can proceed with constructing an RE facility. Because RE projects often span multiple LGU jurisdictions, securing the necessary resolutions from several sanggunians can be particularly challenging. 

LGUs also exercise authority over key land-use and permitting decisions, including: (a) approving zoning classifications for proposed energy facilities; (b) issuing locational clearances, building permits, and business permits; and (c) enacting ordinances governing land use and development standards. If the proposed project site is not aligned with the municipality’s or province’s Comprehensive Land Use Plan (CLUP), developers may face delays or need to secure zoning amendments. In practice, early engagement with mayors, local councils, and community leaders is often recommended in ensuring timely issuance of the required resolutions and permits. 

Commercial and Investment Considerations 

• CL: Can foreign investors now own 100% of renewable energy projects in the Philippines? Explore legal basis (e.g., DOE Circulars) and implications for joint ventures 
   

SyCipLaw: Foreign investors may now generally own 100% of renewable energy projects in the Philippines, a major policy shift from the long‑standing “60‑40” rule, which required at least 60% Filipino ownership in activities involving the exploration, development, and utilization of natural resources. This liberalization began in 2022 and has since been fully incorporated into the current regulatory framework. 

In 2022, the Department of Justice (“DOJ”) issued an opinion clarifying that renewable energy sources such as sunlight, wind, and ocean or tidal energy are not considered “natural resources” within the meaning of Section 2, Article XII of the Philippine Constitution. Under the Philippine Constitution, the term “natural resources” refers to properties that fall within the State’s power of dominium under the Regalian Doctrine, including lands of the public domain, waters, minerals, fisheries, forests, wildlife, and other resources susceptible to appropriation. Because the sun, wind, and ocean energy are not subject to appropriation in the same way, they cannot be classified as “natural resources” and therefore are not subject to the 40% foreign equity cap. This interpretation removed the constitutional basis for restricting foreign ownership in most RE technologies, paving the way for full foreign participation in the sector. Following the DOJ Opinion, the DOE issued Department Circular No. 2022‑11‑0034, which amended the implementing rules of the RE Act allow corporations that are 100% foreign‑owned to enter into renewable energy service or operating contracts with the State. This regulatory change provides foreign developers a clear pathway to wholly own and operate projects involving solar, wind, ocean/tidal, and certain hydro and biomass resources. 

However, specific activities remain subject to the 40% foreign equity limitation, namely: 

1. The appropriation of water directly from a natural source, and 

2. The exploration, development, and utilization of geothermal resources, except where undertaken through a Financial or Technical Assistance Agreement (“FTAA”) for large‑scale operations. 

These carveouts reflect the continued constitutional classification of water and geothermal energy, particularly geothermal steam, as natural resources subject to appropriation and therefore to Filipino-ownership requirements. Furthermore, ownership of private land and use of lands of the public domain continue to be reserved to Filipino citizens and to corporations or entities at least sixty percent (60%) of whose capital is owned by Filipino citizens. 

The DOJ’s interpretation of the constitutional scope of natural resources was further reinforced in the DOE’s Department Circular No. DC2024‑06‑0018, which issued the Revised Omnibus Guidelines Governing the Award and Administration of Renewable Energy Contracts and the Registration of Renewable Energy Developers, embedding this policy shift into the broader RE contracting framework. 

• CL: What are the key legal risks in RE power purchase agreements (PPAs)? 
   

SyCipLaw: Renewable energy PPAs are important to the bankability and long-term viability of RE projects, specifically those that do not rely on the Green Energy Auction Program (“GEAP”) for offtake. The most significant legal risks typically arise from insufficient contract tenure, curtailment and dispatch risk allocation, pricing and adjustment mechanisms, termination regimes, and regulatory change exposure.  

Because PPAs serve as the primary revenue and security underpinning for project financing, lenders closely scrutinize these provisions. For example, these issues are typically flagged during diligence: (i) the PPAs have terms shorter than loan maturity; (ii) early termination options exercisable at the buyer’s convenience; and (iii) lack of renewal or extension clarity. Pricing risk is a core legal concern, and common problem areas include fixed tariffs without inflation indexation. Poorly allocated risks or ambiguous drafting can materially affect financing, lead to disputes, or undermine project financials. 

• CL: What incentives are available for RE developers and how are they accessed? Cover tax perks, Green Energy Auction Program (GEAP), Feed-in Tariff (FiT), etc. 

SyCipLaw: Under the RE Act, renewable energy developers are granted a range of fiscal incentives. New investments in RE resources are entitled to a seven‑year income tax holiday (ITH) beginning from the start of commercial operations. After the ITH period, registered RE developers are subject to a preferential corporate tax rate of 10% on net taxable income, on the condition that the resulting tax savings are passed on to end‑users through lower electricity rates. The RE Act also allows the net operating loss of the RE Developer during the first three years to be carried over for the next seven consecutive taxable years 

In addition, the sale of power or fuel generated from renewable energy sources is subject to a zero percent (0%) VAT rate. The purchase of local goods, properties, and services necessary for the development, construction, and installation of RE facilities likewise enjoys zero‑rated VAT treatment, helping reduce upfront project costs and supporting the overall viability of RE investments. 

In 2021, the DOE launched the GEAP, and subsequent auction rounds (GEA-1, GEA-2, GEA-3, GEA-4 and currently GEA-5) have collectively awarded thousands of megawatts of solar, wind, biomass, hydropower, geothermal, and emerging technologies. These auctions have generated strong developer participation. These auctions have seen robust developer participation, offering winning bidders long-term revenue stability through the Green Energy Tariff (“GET”). Notably, these payments are formalized through a Renewable Energy Payment Agreement to be entered into by the winning bidder and the National Transmission Corporation (“TRANSCO”). Under the GEAP, winning bidders are able to secure a 20-year fixed-price contract, providing long-term predictability that is essential for project financing. It has been reported that the DOE launched at 10-year GEA plan, which will offer 25 GW of renewable energy capacity through annual competitive auctions starting 2026. 

• CL: What are the challenges around land acquisition and indigenous peoples’ rights in RE projects?  

“One common issue is that the actual possessors or users of a project site are often not the same individuals named on the land title”.

SyCipLaw: RE projects typically require large, contiguous tracts of land, whether for solar arrays, wind farms, hydro facilities, geothermal exploration areas, or transmission line corridors, and, as a result, developers frequently encounter a range of legal, regulatory, and practical challenges involving land acquisition and Indigenous Peoples’ (“IP”) rights.  

One common issue is that the actual possessors or users of a project site are often not the same individuals named on the land title. Titles frequently remain in the name of a long-deceased relative or prior owner because heirs or subsequent purchasers did not complete the transfer of ownership, resulting in multiple claimants, overlapping assertions of rights, and protracted negotiations with heirs, informal occupants, or adjacent landowners. Developers must reconcile these claims before validly securing rights to the project site.  

Another pervasive challenge is that many potential RE sites are still classified as agricultural land under the Comprehensive Agrarian Reform Program or under local land use plans, which means developers must go through land reclassification and conversion processes before the property can be used for RE development. These processes, whether with the Department of Agrarian Reform (“DAR”) or with the LGU, can be lengthy, particularly where agricultural tenants or agrarian reform beneficiaries are involved or where the LGU has not yet updated its Comprehensive Land Use Plan. In addition, where the project area overlaps with ancestral domains or lands traditionally claimed or used by Indigenous Peoples, developers must comply with the Indigenous Peoples’ Rights Act, which requires observance of traditional governance systems and the securement of Free and Prior Informed Consent. A recurring pitfall is inadvertently negotiating with individuals who do not have proper authority within the IP community, which may create internal disputes, raise challenges to the legitimacy of the consent obtained, and even result in objections or proceedings before the National Commission on Indigenous Peoples. These issues collectively make land acquisition one of the most complex and time-consuming components of RE project development. 

Given these challenges, it is recommended that developers engage in early and comprehensive due diligence, including land title verification, mapping of land claims, and preliminary assessment of IP presence or ancestral domain boundaries. Early coordination with the LGU, DAR, and NCIP can reduce delays and clarify applicable requirements. 

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WRITTEN BY

Jose Florante M. Pamfilo is a partner at SyCipLaw. He is a former member of the Firm’s Executive Committee and the chair of its Responsible Business Committee. He also heads the Firm’s Sustainability and ESG practice development initiative.

Mark Xavier D. Oyales is a commercial lawyer and a tax specialist. Mr. Oyales’ significant transactional work covers mergers and acquisitions, joint ventures, investments, project and corporate finance, and public-private partnership (PPP) transactions.

1. https://www.evoss.ph/Home/Download/247252

2. The Philippines signed the Paris Climate Agreement on April 22, 2016, and ratified it on March 23, 2017.   

3. dof.gov.ph/president-duterte-approves-phl-commitment-of-75-percent-emissions-reduction-target-by-2030/ 

4. Philippine Energy Plan 2023 – 2050  

5. RE Act, Section 15, Bureau of Internal Revenue Regulation 7-2022.  

6. RE Act, Section 15, Bureau of Internal Revenue Regulation 7-2022.