Philippine Energy Secretary Sharon Garin is seeking to allocate all or most of the coal produced from Semirara Island, the country's primary coal hub, to domestic power plants, as new export rules from top supplier Indonesia pose risks to the country's electricity supply, local media reported on July 27.

Semirara currently exports more than half of its output, the energy secretary said. She recommended that 80% to 90% of production be reserved for local power plants, or ideally the entire volume.

Garin also confirmed the changes in Indonesian export guidelines would have an impact on the country's planned coal contract auction.

Semirara Mining and Power Corp, the operator of coal operations on the island, accounts for more than 90% of domestic coal production. Its 50-year mining contract on Semirara Island expires in July 2027.

The court earlier rejected the company's petition to extend the contract by 13 years. The Department of Energy is now planning to open the blocks to competitive bidding. The auction, however, has been facing delays. Now, the government is targeting to open the process by August or September.

Garin said the postponement allowed the government to revise the terms of reference, including provisions to ensure domestic supply is prioritized.

She acknowledged that some Philippine plants cannot use Semirara coal, which may have prompted the company to sell more abroad. She noted that blending facilities in Indonesia could offer a model for the local industry.

The Philippines relies heavily on imports for about 95% of its coal needs, with 99% of cargoes coming from Indonesia.