According to the Constitution (Article XII, Section 2), “All lands in the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fishing, forests or timber, wildlife, flora and fauna, and other natural resources belong to the state…Exploration, development and utilization [EDU] natural resources are under the control and supervision of the state. The State may undertake such activities directly, or it may enter into co-production, joint venture, or production-sharing agreements with Philippine citizens, or corporations or associations in which at least sixty percent of the capital is owned by such citizens… To emphasize, “natural resources” and “all potential energy forces” are reserved for the EDU of Filipino citizens or corporations, at least 60% of whose capital is held by Filipinos. In short, aliens are banned from the EDU of these resources and forces.
HOWEVER, JUSTICE SECRETARY JESUS CRISPIN “BOYING” REMULLA has formally opined (in Notice No. 21, S2022) that renewable energy (RE), specifically “solar, wind, hydro and oceanic or tidal”, are open to the EDU of outsiders because they are “beyond the scope of the terms … natural resources … and all potential energy forces”.
He explained that “natural resources … should be understood as relating only to those belonging to the same class or species, or having the same characteristics or qualities as those included in the enumeration to which they belong”, in accordance with the statutory interpretation “principles de noscitur a sociis et ejusdem generis. natural’ could not include the sun, the wind or the ocean because they are not subject to appropriation [or ownership by the state or anyone else]…”
ALSO, ACCORDING TO SECRETARY REMULLA, “Potential energy…is energy relative to its position in a given system, or in the basic understanding it is energy at rest.” In contrast, kinetic energy is “the energy possessed by an object, resulting from the motion of that object, or simply energy in motion”. He gave this “example, if a ball is held at head height, it has potential energy relative to [the] ground due to gravity. But when the ball is released, its potential energy decreases and turns into increasing kinetic energy until it hits the ground and stops. The use of the term potential energy necessarily excludes those involving kinetic energy.
Furthermore, he continued, “renewable sources of energy such as solar, wind, hydro and ocean or tidal power…are considered sources of kinetic energy” which are inexhaustible and incapable of being owned by anyone. Thus, they cannot be reserved for Filipinos only. All of humanity owns them and their EDU cannot be limited to nationals of any state.
WHILE I AGREE THAT RENEWABLE ENERGY SHOULD BE OPEN TO FOREIGNERS, not just Filipinos, my reason is simple. Natural resources such as oil, petroleum, coal, gold and other minerals found in the bowels of our land and sea territory, as well as in our exclusive economic zone recognized and/or granted by the United Nations Convention on the Law of the Sea and the 2016 arbitration award won by our country belong to the Philippines and their EDU should be, as they are, only for Filipinos.
On the other hand, renewable energy and kinetic energy sources as opposed to potential energy like sun, wind and tides are not owned exclusively by Filipinos as they are not found only in the Philippines . Consequently, our Charter and its drafters could not intend them for the exclusive education of our citizens, be they individuals, companies or associations.
Moreover, the EDU of these resources requires enormous amounts of capital, technological know-how and risk-taking that we do not have or do not want to undertake or, even if we have, are better used to other equally necessary goods.
Likewise, the end product or services, such as electric power, will directly benefit our people. Decidedly, foreigners who undertake the EDU of these inexhaustible and renewable resources will only be able to sell them in a viable way to us, given the remoteness of our country from other countries. The logistics of bringing them overseas will simply be too complicated and unprofitable.
Then there is the RE benefit of clean, sustainable, non-polluting energy that is safe for our planet and healthy for our people. The EDU of these resources will free us from dependence on foreign oil and coal for our energy needs, thus preserving our foreign exchange reserves while at the same time ensuring us enough power and energy to run the wheels of our industries and factories.
One last word. The EDU of natural resources, renewable or not, and all sources of energy, potential or kinetic, open to outsiders or not, are subject to “full control and supervision by the State”.
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