Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
Introduced by HON. GUS S. TAMBUNTING 
AN ACT 
DEVELOPING THE PHILIPPINES NATURAL GAS INDUSTRY, AND 
APPROPRIATING FUNDS FOR THIS PURPOSE 
EXPLANATORY NOTE 
One of the priority bills of President Ferdinand R. Marcos, Jr. in his 2022 State of the 
Nation Address (SONA) is the "Development of the Downstream Natural Gas Act.”  
This bill seeks to foster the development of the Midstream Natural Gas Industry in a bid 
to strengthen Philippine energy security by diversifying the country’s primary sources of 
energy and promoting the role of natural gas as a complementary fuel to variable 
renewable energy. 
On behalf of the people of Parañaque City’s Second District, and for the common good 
of the Filipino people, the approval of the said measure is earnestly sought. 
REP. GUS S. TAMBUNTING 
2nd District, Parañaque City 
August 31, 2022
8:54 am
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
Introduced by HON. GUS S. TAMBUNTING 
AN ACT 
DEVELOPING THE PHILIPPINES NATURAL GAS INDUSTRY, AND 
APPROPRIATING FUNDS FOR THIS PURPOSE 
Be it enacted by the Senate and the House Representatives of the Philippines 
in Congress assembled: 
SECTIO.N 1. "This Act shall be known as "Development of the Downstream 
Natural Gas Act  
SECTION 2. Declaration of Policies and Objectives — It is hereby declared as 
the policy of the State to 
(a) Ensure reliable and sustainable clean and environmentally responsible
sources of energy
(b)
Develop policies, regulations- operational manuals, and plans. and programs
prioritizing the promotion of the downstream natural gas industry: 
(c)
Ensure a transparent, competitive operation of the downstream natural
gas:
(d)
Declare the business of transporting and selling natural gas för ultimate
distribution to the public as affected with the public interest, and that
State regulation is necessary för the protection thereof':
(e)
To ensure transparent and reasonable rates of natural gas transmission
distribution, and supply in the spirit of fair and open competition: and
(f) To the necessary skills. trade. and Industry necessary to support the
development of downstream natural gas. 
SECTION 3. Definition of Terms
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(a) 
DOE shall refer to the Department of Energy  
(b) 
ERC shall to the Energy Regulatory Commission created by Republic 
Act No. 9136', 
(c) 
Downstream Natural Gas Industry shall refer to the business of 
importing, 
exporting, 
re-exporting, 
and 
shipping. 
transporting, 
processing- refining, storing, distributing, marketing, and/or selling 
natural gas: 
(d) Joint Congressional Power Commission has the same meaning as that of 
Section 62 of Republic Act No. 9136, 
(e) 
Liquified Natural Gas or "LNG is a fossil energy source that formed deep 
beneath the earth's surface. When it is transported to areas other than 
its source, it becomes liquified. - 
(f) 
LNG Terminal includes all natural gas facilities located onshore or in 
State waters that are used to receive. unload, load, store, transport, 
gasify, liquefy, or process natural gas that is imported to the Philippines 
from a foreign country. exported to a föreign country from the 
Philippines, or transported in areas within the State by waterborne 
vessel„ but does not include waterborne vessels used to deliver natural 
gas to or from any such facility: 
(g) 
Philippine Energy Plan or "PEP refers to the overall energy program 
formulated yearly by the DOE and submitted to congress pursuant to 
Republic Act No. 7838•, 
(h) 
 Power Development Program or 'PDP " refers to the indicative plan for 
managing electricity demand through energy-efficient programs and for 
the upgrading, expansion, rehabilitation, repair, and maintenance of 
power generation and transmission facilities, formulated and updated 
yearly by the DOE in coordination with the generation, transmission and 
distribution utility companies. 
SECTION 4. Powers and Functions of the DOE Aside from its existing powers 
and functions, the DOE shall exercise oversight and monitoring of the development of 
the downstream natural gas industry, and the regulation of the construction and 


establishment of natural gas terminals and other natural gas-related Facilities. [n order 
to achieve this purpose, the DOE shall have the following authority  
(a) To create and promulgate the rules and regulations to implement this Act 
within six (6) months from, effectivity, in coordination with the ERC DENR, and other 
concerned Government Agencies and natural gas participants. 
(b) Jointly with the natural gas industry participants and the Joint Congressional 
Power Commission, to formulate the Natural Gas Supply. Transmission, 
and Distribution Code which shall contain the detailed rules for the sale 
and purchase of natural gas. Said rules shall provide the mechanism for 
determining the price of electricity covered by bilateral contracts 
between sellers and purchasers of natural gas. The price determination 
methodology shall be subject to the approval of the ERC and shall reflect 
accepted economic principles and provide a level playing field to all-
natural gas industry participants. Said rules shall likewise establish 
standards on gas quality, facility installation, and of operation. 
c) To prepare a Philippine Natural Gas Industry Development Plan and 
integrate the same into the PEP 
(d) To establish the rules or procedure I-or the application for permits for the 
construction and maintenance of LNG generation facilities and 
regasification units. including terminals, and pipelines. and other related 
Facilities for the transmission and distribution of natural gas which 
include, among others: (1) Notice to Proceed (NTP), (2) Permit to 
Operate and Maintain a downstream natural gas project/facility (POM (3) 
Permit to Construct, Expand. Rehabilitate. and Modify a downstream 
natural gas project facility (PCERM), (4) Accreditation to Import, Supply, 
and Transport Natural Gas- (5) Acknowledgment to Import LNG- (6) 
Acknowledgement to Supply and Transport Natural Gas. (7) Certificate 
of Public Convenience and Necessity 
 
(e) evaluate the applications for permits for the construction and maintenance 
of LNG generation facilities and regasification units, including terminals, 
pipelines, and other related facilities for the transmission and distribution 
of natural gas- which include. among others. ( l ) Notice to Proceed 
(NTP). (2) Permit to Operate and Maintain a downstream natural gas 
project/facility (POM), (3) Permit to Construct Expand, Rehabilitate, and 
Mod it) a downstream natural gas project/ facility (PCERM), (4) 
Accreditation to Import, Supply. and Transport Natural Gas, (5) 


Acknowledgement to Import LNG. (6) Acknowledgment to Supply and 
Transport Natural Gas- (7) Certificate of Public Convenience and 
Necessity. 
(f)  To revoke or suspend. after due notice and hearing, any permits issued in 
pursuance of a natural gas project/facility of any person that fails to 
comply with the rules and regulations of this act, the Natural Gas Supply. 
Transmission, and Distribution Code. and any other requirement issued 
by the DOE in compliance with this Act. For this purpose, the DOE shall, 
within six (6) months from the issuance of the IRR and the Natural Gas 
Supply, Transmission, and Distribution Code, issue the corresponding 
rules of procedure regarding this Act. 
(g) 
To issue rules and regulations for the importation. storage, 
regasification, and transport of LNG by the PEP. 
(h) 
Original and exclusive jurisdiction over all cases of contesting permits 
non-price regulation, abuse of market power, any anti-competitive 
behavior, and other penalized acts by this Act. 
(i) 
To establish a set of fiscal incentives to promote and encourage the 
further exploration of potential supplies of indigenous natural gas, in 
consultation with the natural gas industry participants and the approval 
of the Joint Congressional Power Commission: 
To undertake an information campaign, to educate the public on the 
benefits of developing the downstream natural gas industry, in 
coordination with other government agencies, and as may be 
appropriate  
(k) 
issue rules and regulations to promote competition and prohibit/penalize 
abuse of market power, and market manipulation. and any other anti-
competitive behavior, within one year from the effectivity of this Act, in 
coordination with the ERC, and upon due notice and public consultation. 
(l) 
To exercise such other powers and functions as may be necessary or 
incidental to obtain the objectives of this Act. 
SECTION 5. Powers and Functions of the ERC — Aside from its existing 
powers and functions, the ERC shall exercise regulatory responsibility for the 


implementation of this Act To achieve this purpose. the ERC shall have the authority 
for the following. 
(a) Establish the rate-setting methodology for the sale and purchase of natural 
gas. including the supply, transmission, and distribution of natural gas. 
The rates must provide a level playing field to all-natural gas industry 
participants. Said rules shall likewise establish standards on gas quality, 
facility installation, and safety of operation. 
(b) Exercise such other powers and functions as may be necessary or 
incidental to obtain the objectives of this Act 
SECTION 6. Importation of "natural gas: LNG Terminals The importation of 
natural gas and the maintenance and operation of LNG terminals shall be governed by 
the following 
(a) 
Starting six (6) months from the effectivity of this Act. no person, juridical 
or natural, shall be allowed to import natural gas without having first 
secured an order by the DOE authorizing it to do so. The DOE shall 
Issue such order upon application, unless, after due notice and hearing_ 
it finds that the proposed importation will not be consistent with the public 
interest. The approval of the DOE for the construction, establishment, 
maintenance, and operation of any such LNG terminal shall not 
automatically mean approval to import natural gas.  
(b) 
LNG Terminals — the DOE shall have the exclusive authority to approve 
or deny applications for the siting, construction- expansion, or operation 
of an LNG terminal. Upon the filing of the site application, construct. 
expand„ or operate an LNG Terminal. the DOE shall 
i. 
Set the matter for hearing 
ii. 
Give reasonable notice of hearing to all interested persons, 
including the Local Government Unit in which the LNG terminal is 
located, 
iii. 
 
Decide the matter by this subsection: and 
Issue or deny the appropriate order 
SECTION 7. Exploration of natural gas "The DOE shall include the exploration 
of indigenous sources of natural gas m accordance with the PEP Such amounts 
necessary to finance the initial implementation of this Act shall be sourced from the 
unprogrammed funds in the current General Appropriations Act (GA A) ['hereafter, 


such amounts necessary för its continued implementation shall be included in the 
annual GA A. There shall also be appropriated amounts for the following, 
(a) 
Upon application and approval, the DOE shall grant financial support to 
qualified persons, juridical or natural, for the exploration of natural 
gas. 
(b) 
Jointly with the DENR, the DOE shall provide for a streamlined process 
for the application for a permit to explore natural gas. 
SECTION 8. Construction, extension, or abandonment of natural gas facilities 
(a) Construction — No person. natural or juridical, may be allowed to site or 
construct a natural gas facility without the approval of the DOE. They 
shall issue a Certificate of Public Convenience and Necessity to any 
person who is approved to construct and operate a natural gas facility. 
(b) Extension or improvement No person, natural or juridical, may be allowed 
to extend a natural gas facility without the approval of the DOE Who shall 
have the exclusive authority to approve or deny an application thereof. 
This shall include the extension of its transportation facilities and the 
physical connection of transportation facilities. 
(c) Abandonment No natural gas company granted a permit to operate as such, 
shall abandon all or any portion of its Facilities, or any service rendered 
using such without the permission or approval of the DOE, after hearing 
and finding by the DOE that the available supply of natural gas is 
depleted to the extent that the continuance of service is unwarranted. or 
that the present or future public convenience or necessary permit such 
abandonment. 
SEC"TION 9. Determination of service area: jurisdiction of transportation to 
ultimate consumers — The DOE- after due notice and hearing, may determine the 
service area to which each authorization under this section is to be limited. Within such 
service area. as determined by the DOE, a natural-gas company may enlarge or 
extend its facilities to supply increased market demands in a such service area without 
further authorization. 


Nothing contained in this section shall be construed as a limitation upon the 
power of the DOE to grant certificates of public convenience and necessity for service 
of an area already being served by another natural-gas company. 
SECTION 10. Prohibition on market manipulation It shall be unlawful for any 
entity, directly or indirectly, to employ, in connection with the purchase and sale of 
natural gas or the purchase or sale of transportation services, OF-any manipulative or 
deceptive device or contrivance, in contravention to the rules and regulations 
established by the DOE, as may be prescribed as necessary in the public interest for 
the protection of natural gas players. Any person that violates the prohibition on market 
manipulation shall be subject to a civil penalty of not more than Ten Million Pesos 
(PHP 10,000.000 00) per day per violation as long as the violation continues. 
No penalty shall be assessed without due notice and hearing. “The DOE shall 
have original jurisdiction to hear cases on market manipulation or any complaints on 
abuse of market position. 
SECTION 11. Access to accounts, records, and other data 
(a) 
Every natural-gas company shall make. keep and preserve för such 
periods, such accounts, records of cost-accounting procedures, 
correspondence, memoranda, papers, books, and other records as the 
DOE may by rules and regulations prescribe as necessary or 
appropriate for purposes of the administration of this Act: Provided, 
however, That nothing in this Act shall relieve any such natural-gas 
company from keeping any accounts- memoranda, or records which 
such natural-gas company may be required to keep by or under the 
authority of any law. The DOE may prescribe a system of accounts to 
be kept by such natural gas companies and may classify such natural-
gas companies and prescribe a system of accounts for each class. 
(b) 
The ERC shall at all times have access to and the right to inspect and 
examine all accounts, records, and memoranda of natural-gas 
companies: and it shall be the duty of such natural-gas companies to 
furnish to the ERC, within a such reasonable time as the ERC may order, 
any information with respect thereto which the ERC may by order 
require. including copies of maps, contracts- reports of engineers- and 
other data, records, and papers, and to grant to all agents of the ERC 
free access to its property and its accounts, records, and memoranda 
when requested so to do. No member, officer, or employee of the ERC 
shall divulge any fact or information which may come to his knowledge 
during the course of 


examination of books- records- data- or accounts, except insofar as he 
may be directed by the ERC or by a court. 
SECTION 12. Separability Clause - If. for any reason, any provision of this Act 
or any part thereof shall be held unconstitutional and invalid, the other parts or 
provisions of this Act- which are not affected thereby shall remain in full force and 
effect 
Section 13. Repealing Clause 
All  
decrees, orders, rules, and 
regulations or parts thereof inconsistent with any of the provisions of this Act are 
hereby repealed, amended, or modified accordingly 
SECTION 14. Effectivity - This Act shall take fifteen (15) days after its 
publication in the Official Gazette or a newspaper of general circulation. 
Approved.