The Philippines is advancing plans to establish its first coal-blending facility, seeking to hedge against supply risks as top supplier Indonesia prepares to tighten export controls, the Department of Energy (DOE) said on August 27.

Energy Secretary Sharon Garin said the government is seeking private sector investment to fund construction, with the DOE acting in an oversight role. The facility would allow local power companies to blend low-grade domestic coal with imported grades to meet the technical specifications of existing plant turbines.

The Philippines sources about 95% of its coal from Indonesia. "What we need is a diversification of our risk. So we need to source it from different countries if there's an option, or the best option is to source it in-country," Garin said.

Indonesia, the world's largest thermal coal exporter, plans to implement a one-stop export framework that would dictate resource pricing and manage supply globally. Rather than relying on foreign market exchanges. The shifting policies have raised energy security concerns among regional import-dependent economies.

Garin said most domestic coal is not directly suitable for existing power plants, but blending could allow greater use of local supply. The DOE is eyeing Mindanao as a potential pilot location due to its concentration of small-scale mining, though feasibility studies are still pending.

The facility is unlikely to be operational before Indonesia's expected January 2027 export tightening, Garin acknowledged. Manila is assessing alternative suppliers, with some buyers already sourcing from Australia and preliminary discussions under way with a South American supplier.