Philippine-British Friendship Day: What the UK’s Energy Transition Shows, and Why Executive Order 127 Makes It Urgent

1. Eighty years of friendship, one useful example

Today, 20 October, is Philippine-British Friendship Day. The two countries have had diplomatic relations for 80 years. Trade between them reached a record £3.2 billion last year. Most of that is goods and services. This article is about something else the UK can offer: a worked example.

Britain had the same problem the Philippines has now. It imported much of its fuel. Its power was dirty and expensive. Its heating ran on combustion. Over fifteen years it changed that, and the change is now measurable. Not finished, not perfect, but measurable. That makes it worth copying from.

2. What Britain actually did

The numbers below come from the UK grid operator, the certification body for small renewables, and independent analysts. They are for 2025, the most recent full year.

Three things stand out. First, the grid got clean before the buildings did. Second, heat pumps only took off once a grant took the sting out of the first cost. Third, batteries arrived last, and fast, once people had solar on the roof and a reason to store it.

3. Why this matters more here than there

The Philippine grid emits about 0.7 kg of CO₂ for every kWh. That is five to six times the UK figure. Businesses here also pay some of the highest electricity prices in Asia. So every kWh a Philippine factory, hotel or cold store avoids is worth more, in pesos and in carbon, than the same kWh saved in Manchester.

The equipment that did the work in Britain works better here. A heat pump moves heat from the air. At 32°C there is far more heat in the air than at 8°C, so the same machine gives more hot water for the same electricity. British heat pump makers design for a cold climate. In Luzon their machines run near the top of their range all year.

That is the case for British technology in the Philippines in one sentence: proven in a hard climate, more profitable in an easy one.

4. Executive Order 127, in plain words

On 13 October 2026 the President signed Executive Order No. 127. Its title is long. What it does is short:

• It orders a rulebook. The Department of Environment and Natural Resources must draft a Philippine Carbon Market Policy Framework within 30 days. The committee then has 30 days to approve it.
• It names a referee. The DENR becomes the national authority for carbon markets, both the international kind under Article 6 of the Paris Agreement and the voluntary kind.
• It creates a committee. The Climate Change Commission chairs it. The Department of Finance is vice-chair. The members include the Department of Energy, the Department of Trade and Industry, and the Securities and Exchange Commission.
• It builds a ledger. A Philippine National Carbon Registry will track every credit issued, transferred, cancelled or retired. Existing projects must move onto it.
• It leaves a door open. The Order says guidance on “transition credits” and any “possible transition of the VCM to a compliance carbon market” or carbon pricing needs the Department of Finance’s concurrence.

Why the SEC seat matters: the same regulator that will help write the carbon market rules already requires listed companies to report their emissions. The two policies will meet in your annual report.

5. The SEC already wants your Scope 1 and Scope 2

SEC Memorandum Circular No. 16, Series of 2025, requires Philippine companies to report greenhouse gas emissions under PFRS S1 and S2, the Philippine adoption of the international ISSB standards. It is phased:

• Large-cap listed companies: report for financial year 2026.
• Mid-cap: financial year 2027.
• Small-cap and large non-listed entities: financial year 2028.
• Limited assurance on Scope 1 and 2 follows two years after each tier’s first report.

In a factory, hotel or cold store the two scopes are simple. Scope 1 is what you burn and what leaks: the diesel or LPG in your boiler, and the refrigerant that escapes from an HFC chiller every year. Scope 2 is the grid electricity you buy, at about 0.7 kg of CO₂ per kWh. A boiler burning 1,000 litres of diesel a month puts about 32 tonnes of CO₂ a year into Scope 1. That number now goes in the annual report, and in two years an auditor checks it.

If you supply a large-cap company, expect the question sooner. Their Scope 3 is your Scope 1 and 2.

6. What the British example says to do first

None of this needs a grant to pay back here. In Britain a heat pump needed £7,500 of help to compete with cheap gas. In the Philippines it competes with imported diesel and the most expensive grid power in the region. The arithmetic already works. The policy is now catching up with it.

Sources & References

1. Official Gazette of the Republic of the Philippines, Executive Order No. 127, s. 2026, signed 13 October 2026.
2. Securities and Exchange Commission, Memorandum Circular No. 16, Series of 2025, sustainability reporting under PFRS S1 and S2.
3. MCS, “The 2025 Low Carbon Landscape”: over 60,000 certified heat pump installations, 267,032 rooftop solar installations, over 40,000 battery installations in 2025.
4. NESO, “Britain’s Energy Explained: 2025 Review”: renewables about 44% of electricity; first full year without coal; last coal plant closed September 2024.
5. Carbon Brief analysis of 2025 UK grid carbon intensity, about 126 g CO₂/kWh.
6. Department of Energy, Philippines, national grid emission factor, about 0.7 kg CO₂/kWh.
7. British Embassy Manila, 80th anniversary of UK–Philippines diplomatic relations, June 2026: two-way trade £3.2 billion.