Relations between the two nations stretch back millennia as both countries were colonized by Spain during the Age of Imperialism, the two became military allies with the governments of each nation supporting one another.
An ulterior testimony of their long-lasting alliance is the fact in 1949 when Indonesia got its independence, the Philippine government immediately supported and recognized Indonesian independence, in addition, they both have supported each of their policies in the region such as democracy and the maritime law in the South China Sea as they were enjoying a cordial bilateral relationship, furthermore, both countries have established embassies in each capital, to be precise, Indonesia has its embassy in Manila and consulate in Davao City, while the Philippines has its embassy in Jakarta and consulate in Manado and Surabaya, consequently high-rank stately visits have been conducted for years.
The Indonesia and Philippines relationship has been traditionally close for many years and this relationship has grown stronger during the history of ASEAN with its established Head Quarters in Jakarta, both nations are members of the Non-Aligned Movement and APEC, as well as members of the East ASEAN Growth Triangle together with Brunei Darussalam and Malaysia in the BIMP-EAGA, even geographically they resemble each other as they are mainly composed of islands.
In addition, bilateral trade has trended positively in recent years, so much so that according to the Indonesian Ministry of Trade, trade has increased from $1.12 billion in 2003 to $2.9 billion in 2009, and $3.89 billion in 2010.
Moreover, Indonesia is currently the Philippines’ biggest supplier of coal, exporting about 70% of the Philippines’ coal imports, in spite of this though, as of June 2016, Indonesian coal exports to the Philippines are currently on a moratorium due to the growing concern of piracy in the Sulu Sea.
There is a lot of talks right now about Indonesia’s announced ban on coal exports, which will last for about a month, from January 1st to the 31st, the background to the coal embargo is the tight power situation in Indonesia, which could lead to serious blackouts and as a result, the government asked coal companies to divert coal for export to the domestic market, so it leads to the export ban.
The Indonesian president has taken strict enforcement measures against coal companies that do not comply with this export ban, including revoking their business licenses.
Let it be known that Indonesia is the world’s largest coal exporter and largest export market in China exporting 29 million tons of the country’s 450 million tons of coal produced accounting for about 32% of its exports, and it also exports to India, the Philippines, Malaysia, South Korea, and Japan.
The Association of Indonesian Coal Companies has asked for an “immediate reversal of the export ban,” saying that “the decision was made out of the blue without prior consultation with the industry.”.
To add to the confusion and anger of the multiple coal associations, off the coast of Indonesia, there are currently several ships already loaded with coal still at anchor, waiting to see if the export ban will be lifted or not.
The ban on exports was announced last Saturday, following an announcement by the energy ministry that the government would seek an export ban on coal for January and the Indonesian Government justified the measure with the fact that the country was facing a critical period in its coal supply situation, citing concerns that insufficient supply at domestic power plants could result in widespread blackouts.
Obviously, the announcement, which has been met with expected opposition and grudging acquiescence from coal industry groups, reflects the prominent role that the Indonesian government plays in the country’s electricity sector.
In fact, the state-owned utility Perusahaan Listrik Negara (PLN) maintains a complete monopoly on the transmission and distribution of power in Indonesia, as well as owning and operating 70 percent of Indonesia’s power generation capacity, this allows the Indonesian government to keep retail electricity prices low and insulate the public from swings in the global price of coal.
The Indonesian Coal Mining Association (ICMA) met trade ministry officials during the weekend to seek a solution, however, the association has called for the ban to be revoked, saying it was “taken hastily without being discussed with business players” adding that they “might see coal from other origins such as Australia coming to India and diversion of vessels going to other countries in the region such as Bangladesh coming to India, if India pays a higher price,” as per iEntergy’s Vyas words.
The Philippines’s energy secretary Alfonso Cusi has appealed to Indonesia to lift its coal export ban, saying the policy will be detrimental to economies heavily reliant on the fuel for power generation, Cusi even made the appeal in a letter sent via the Department of Foreign Affairs to Indonesia’s Minister of Energy and Mineral Resources, the energy secretary has also asked the foreign affairs department to intercede and appeal on behalf of the Philippines through the Association of Southeast Asian Nations (ASEAN) cooperation mechanism.
The Philippines, which is still heavily dependent on coal for power generation, buys most of its requirements from Indonesia, and some, more expensive, supplies from Australia and Vietnam.
Nearly 70 percent of the 42.5 million tonnes of Philippine coal supply in 2020 was imported, according to government data.
Senator Win Gatchalian, who heads the Senate energy committee, has called on the energy department to prepare contingency measures because of the export ban, including looking for other potential suppliers.
The DOE’s Electric Power Industry Management and Energy Resource Development Bureaus will meet on Tuesday, January 11, to discuss how to manage the issue and potential strategies.
Meanwhile, Meralco’s Utility Economics chief Lawrence S. Fernandez said the ban will affect three of the power distributor’s suppliers: San Buenaventura (455MW), Quezon Power (440MW), and Panay Energy (70MW), “According to our suppliers, they have sufficient supply of coal for at least two months,” Fernandez said adding that “In a coming couple of months, we are assured that there will be no supply disruption.”
Indonesia’s ban on coal exports and the resulting electricity situation in China and the rest of the neighboring countries are probably checkpoints before the Chinese New Year, and there has been no comment on whether the full export ban will continue until the end of January.
References:
Philippines urges Indonesia to lift coal export ban, available at:
https://www.aljazeera.com/economy/2022/1/10/philippines-urges-indonesia-to-lift-coal-export-ban
Indonesia bans coal export to head off blackouts, available at:
https://thediplomat.com/2022/01/indonesia-bans-coal-exports-to-head-off-blackouts/
Indonesia bans coal export in January on domestic power worries, available at:
https://www.mining-technology.com/news/indonesia-coal-export-ban/
Indonesia miners seek solution as coal export ban rattles sector, available at:
Indonesia coal miners seek export ban exemptions as costs grow, available at:
Philippines urges Indonesia to lift coal export ban, available at:
Indonesia secures coal supplies amid hopes of end to export ban, available at:
Indonesia coal export ban, what is the Impact on the shipping market and on China, available at:
http://forwarder-university.com/20220107-radio/
Indonesia-Philippines relations, available at:
https://althistory.fandom.com/wiki/Indonesia-Philippines_relations_(21st_Century_Crisis)
https://www.aseanbriefing.com/news/philippines-relationship-asean/
Philippines wants Indonesia to lift Coal export ban, available at:
https://www.esquiremag.ph/politics/news/philippines-indonesia-coal-export-ban-a2635-20220110
By The European Institute for International Law and International Relations.
