In the Philippines, the local petroleum industry has been relatively well established with the presence of three major oil refineries. In contrast, petrochemicals is still at its infancy stage. Among all ASEAN countries (except Brunei and Vietnam), only the Philippines has no real or integrated petrochemical industry to speak of.

After a series of attempts in the past, the industry is about to take off, with the necessary support from the government and the private sectors. Discussions are ongoing on the potential integration of refinery operations with the planned petrochemical complex in Limay and Mariveles, Bataan.


Petrochemicals

It is only now that the renewed interest and efforts of finally establishing the local petrochemical industry are finally paying off. The PNOC Petrochemical Development Corporation (PPDC) is currently developing a petrochemical industrial estate located in Limay and Mariveles, Bataan. With an area of about 500 hectares, the complex is envisioned to house the first world class petrochemical complex in the country.

At least three downstream plants are now underway: polypropylene, polyethylene, and polyvinyl chloride.

A factor seen to affect the viability of the industry is the subject of incentives, fiscal and non-fiscal, which will be made available to these plants. The ultimate objective is for naphtha to have a zero tariff, being the primary raw material of the cracker. Capital incentives and tax holidays are also expected to boost the otherwise marginal returns of the cracker plant.


Petroleum Products

Total demand for petroleum products has increased substantially over the recent years. This has been fueled mainly by the transportation, power, and industrial sectors.

The total petroleum demand is projected to increase by an average of 5% per year, with LPG registering the highest growth rate at 12%. This is due to the healthy demand for residential and commercial cooking use.

Meanwhile, the robust sale of motor vehicles, the increased urbanization in the countryside, and the anticipated positive effects of the oil price deregulation, substantial growth is also projected for motor gasoline. On the other hand, with the displacement of oil thermal plants by coal, geothermal, natural gas and hydropower, the expected increase in the demand for fuel oil will be minimal. On the overall, projections indicate a lightening of the product mix, led by the growth in LPG and diesel demand.