By Sheldeen Joy Talavera, Reporter

The Philippines' Department of Energy (DoE) has abandoned its planned coal block auction for this year, scrapping a bid round that covered the country's largest coal mine, operated Semirara Mining and Power Corp. (SMPC).

In an advisory dated Sept. 15, the department said it had terminated the 2026 Coal Bid Round, which was set to award coal operating contracts covering three pre-determined areas. The move halts, for this year at least, any awarding of the contracts over the three areas.

The decision followed concerns raised by stakeholders during the pre-submission conference. Among the issues cited were developments affecting Semirara Island — one of the areas offered in the auction — including continuing water seepage, as well as legal considerations.

Those concerns prompted the DoE to review the criteria for awarding coal operating contracts for the three areas. The department said canceling this year's auction creates an opportunity to review and further develop "a fair, equitable, transparent, and comprehensive evaluation framework" for the awarding of the contracts. The framework review resets the timeline for an auction that had already missed its original April bidding schedule.

"Such framework shall, consistent with the national interest, give due consideration to securing appropriate and measurable economic returns and benefits commensurate with the value and characteristics of the offered area," the DoE said.

Launched in February, the bid round offered three coal areas estimated to hold around 207 million metric tons of coal reserves. Five blocks covered the municipalities of Benito Soliven, Naguilian, and Cauayan in Isabela province, while three blocks spanned the municipalities of Amulung and Iguig in Cagayan province.

The auction also included 10 blocks on Semirara Island in Antique — the largest share of the 18 blocks offered — covering the flagship asset of SMPC, the country's largest coal producer. The company has operated the site for nearly 50 years but failed to renew its coal operating contract, which is set to expire in July 2027. With the round scrapped, the question of who operates the site after that date is left without an active awarding process for now.

The bidding was originally scheduled for April but was postponed while the DoE continued work on the terms of reference. SMPC earlier questioned the proposed joint administrative order from the DoE and the Department of Environment and Natural Resources that would set the rules for awarding natural resource contracts, warning that some provisions could affect its existing rights.

The termination also runs counter to the recent statement of Energy Secretary Sharon S. Garin, who said the bidding would push through this year as the DoE prepared a department circular that would determine all the terms and procedures.

"We are far from starting the bidding, but the bidding will happen within the year," she said at a Sept. 15 briefing. The advisory scrapping the round carried the same date.

The Energy chief also said the government wants coal produced under the contracts to be sold domestically rather than prioritizing exports.

"We want to make sure that the coal is being sold in the Philippines, that optimization of our resources for energy security. Learning from our experience with the Middle East conflict, we need to secure our resources," Ms. Garin said.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the delay in awarding the Semirara contract narrows the window for potential replacement operators to prepare for operations.

"The closer we get to the expiration date without a clear process, the more difficult it becomes for SMPC — and potentially any alternative operator — to plan for operations beyond the current contract," Mr. Arce told BusinessWorld.

He added, however, that getting the framework right may be more important than proceeding simply to meet the original timetable.

"A rushed bidding process that later results in disputes over the rules, existing assets or the terms of the succeeding contract could create even greater uncertainty," he said.

For the three areas — and for SMPC, whose existing contract runs to July 2027 — the next milestone is the evaluation framework the DoE said it would further develop for the awarding of the contracts.