Page 21 - Policy Economic Report - September 2026

POLICY AND ECONOMIC
OIL & GAS MARKET

governments continue to rely on conventional fuels to manage short-term disruptions, the crisis is
simultaneously strengthening the case for longer-term diversification of energy supply.

The Philippines has emerged as the most active policymaker in the region, with 13 renewable-energy and
electrification policies identified in the analysis. The country introduced 22 energy-related measures
overall, partly reflecting its declaration of a national energy emergency in March 2026. The emergency
response included measures to secure oil supplies and manage fuel prices, alongside longer-term
initiatives aimed at accelerating renewable energy, electric vehicles and energy efficiency.

Solar energy has been a particularly important component of the Philippines' response. The country
introduced at least seven solar-related policies following the onset of the conflict, including measures
intended to simplify the installation of solar and battery-storage systems by households and accelerate
net-metering applications. The policy push has been accompanied by a sharp increase in solar-equipment
imports: between March and July 2026, Philippine imports of solar wafers, cells and panels from China
reached approximately 9.5 GW, compared with 4.1 GW during the corresponding period of 2025.

The broader regional trend is also visible in Vietnam and Thailand, which introduced seven and six clean-
energy policies, respectively. Vietnam has taken steps to enable data centres and EV charging stations to
purchase green electricity directly, while Thailand has introduced financing initiatives supporting solar and
electric-vehicle deployment. Indonesia has announced plans to add 100 GW of solar capacity over three
years, representing one of the region's more substantial renewable-energy expansion initiatives.

The shift is occurring against a particularly challenging energy-market backdrop. Southeast Asian
economies are relatively dependent on imported oil and gas, leaving them exposed to disruptions in
international supply routes and fluctuations in global commodity prices. Asian LNG prices averaged
around US$22/MMBtu in August 2026, more than twice the pre-conflict average of US$10.8/MMBtu
recorded in February. The increase in energy costs has therefore strengthened the economic rationale for
reducing exposure to imported fossil fuels.

The International Energy Agency's Southeast Asia Energy Outlook 2026 similarly identifies diversification,
clean energy, electrification and energy efficiency as increasingly important tools for reducing the region's
exposure to imported fuels. The IEA estimates that investment in renewables, electrification and
efficiency since 2015 has already helped moderate fossil-fuel import requirements, generating
around US$30 billion in avoided import costs in 2025. Renewable capacity stood at around 120 GW in
2024 and could nearly triple by 2035 under existing policy settings, with significantly greater expansion
possible if announced targets are achieved.

However, the transition remains uneven and faces significant implementation challenges. Many
Southeast Asian economies continue to depend heavily on coal and imported gas for electricity
generation, while renewable deployment requires corresponding investment in transmission networks,
storage and grid flexibility. The Philippines, for example, continues to have a power system heavily
dependent on coal even as solar deployment accelerates.

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