The sachet

Pick up a sachet of sauce, or shampoo, in any convenience store and turn it over in your hand. What you hold is a sliver of plastic film that is ingrained in our daily lives, but you rarely think about what it is made of or where it comes from. That little pouch is polyethylene, produced from ethylene that comes from crude oil, much of which runs through the Strait of Hormuz.

We shut down the only plant in this country that could make the ethylene ourselves. We did it in January 2025, in response to market conditions. Importing the finished resin from China, Malaysia, or Singapore was cheaper than making it here. The logic was sound. But the timing was catastrophic.

A persistent global oversupply had steadily eroded profit margins for naphtha-derived products. JG Summit’s decision to shut its naphtha cracker was a rational response to a market that had turned against it.

But by this March, petrochemical producers in Singapore, Thailand, Indonesia, and South Korea were either idling plants or cutting output because feedstock had either disappeared or tripled in price.

The Middle East supplies roughly 65% of the naphtha Asia uses in making ethylene. With the Strait of Hormuz practically shut, buyers scrambling for alternatives have been paying premiums of $150 to $200 per ton. The cheap import that replaced our domestic production is no longer cheap, and in some cases is no longer available at all.

In May 2025, before the Hormuz closure, JG Summit CEO Lance Gokongwei said: “We’re going to put the [petrochemical] plant on indefinite shutdown for at least two years. At that point, we will explore options, which include the full sale of the business, or a joint venture, or at least preserving it for at least two years, hoping that the cycle will turn around at some point.”

The plant is not gone yet. The facilities have been preserved and maintained. In March, JG Summit appointed International Process Plants to evaluate a possible sale of the Batangas petrochemical complex. The equipment is still there. The question is whether anyone has the clarity to see what it is worth now compared to what it was worth when it was shut down.

China alone is projected to add roughly 4.55 million tons of new polypropylene capacity and 6.2 million tons of new polyethylene capacity this year, built around coal-to-olefins technology that aims to insulate Chinese producers from the very naphtha crisis strangling everyone else.

S&P Global has warned that oversupply will keep margins extremely weak through 2026 and 2027. In a normal year, that makes any standalone Southeast Asian cracker like JG Summit’s in Batangas almost impossible to restart commercially.

But this is not a normal year. The oil shock has changed the policy question. From: who can make it cheapest? The new question is: who can still make it when shipping lanes are disrupted, exporters reserve supply for themselves, and the domestic plant has already shut down?

Japan is showing what the downstream answer looks like. Kagome announced in May that it would introduce simplified packaging for some of its ketchup products because white ink supplies, linked to naphtha from the Middle East, had tightened. The new bottles are transparent on the lower half.

Calbee temporarily moved 14 potato chip varieties to monochrome packaging for the same reason, and announced price increases on 25 snack items starting September. Nisshin Seifun Welna stopped printing the boiling time on pasta packaging tape.

The products inside are unchanged. The packaging is simpler because the petrochemical chain behind it has become less secure. A food item is not only made of food. It is also made of packaging that uses plastic film, printing ink, label coating, and adhesive, all of them tracing back to naphtha.

That sachet in your hand is not just polyethylene. It is ink, coating, and film, all downstream of the same supply chain now under stress because of the Hormuz crisis. Japan’s experience shows that petrochemical shocks are consumer shocks in slow motion.

This is why the shutdown of the Philippines’ only naphtha cracker is a national resilience issue. A country that imports most of its resins and packaging inputs may appear efficient in normal times. In a supply shock, it becomes a price-taker not only for oil, but for the materials that carry food, medicine, water, and hygiene products.

I propose something specific. The Philippines generates roughly 2.7 million tons of plastic waste annually. Much of it is sachets, films, wraps, and flexible packaging made of polyethylene and polypropylene, the same materials the JG Summit cracker was designed to produce.

A circular feedstock strategy built around plastic-waste pyrolysis would connect those two facts. Pyrolysis is a thermal process that breaks down plastic waste in low-oxygen conditions and converts it into oil that may, with proper upgrading, serve as partial feedstock for a cracker.

Key to this is “proper upgrading.” A basic pyrolysis reactor is not expensive. But a system capable of producing oil clean enough to feed a petrochemical cracker is far more complex than waste management, more akin to chemical refining. The capital cost is significant. This is why public co-investment matters.

The policy environment has shifted in favor of this approach. The Maharlika Investment Corp., our sovereign wealth fund, has approved a Strategic Co-Investment Framework prioritizing circular economy projects, a suitable instrument for risk-sharing on feasibility work and pilot financing.

And under Executive Order 18, advanced chemical recycling and waste-to-feedstock plants now qualify for Strategic Investment status, compressing local permitting from nine to 12 months down to below 120 days. The Department of Environment and Natural Resources (DENR) also updated its Environmental Compliance Certificate rules in late 2025 to formally distinguish closed-loop non-combustion chemical pyrolysis from incineration, which remains prohibited. The legal path that was previously ambiguous has been cleared.

The government must now commission a formal technical feasibility study: how much sortable polyethylene and polypropylene waste can be aggregated near Batangas, what preprocessing it requires, and what upgrading the resulting oil needs before any operator could test it as a cracker feed.

Companies are already required by law to recover plastic packaging waste, with targets reaching 80% by 2028. They all need somewhere to send that material. A pyrolysis-to-feedstock program gives them a higher-value destination than landfill diversion.

For decades, the Philippines saw importing basic industrial inputs as rational, and domestic production as a burden. That model made sense during stable trade and open shipping lanes. It stopped making sense the moment the Strait of Hormuz was compromised, and the regional supply chain collapsed.

A cheap imported input is not cheap if it disappears in a war. A resin made efficiently in China is not efficient for the Philippines if it cannot be shipped here. A plant that lost money in a buyer’s market was worth more to this country than we admitted when we let it go dark.

The JG Summit plant in Batangas is still standing. The plastic waste that could feed it is piling up across the country. The regulatory tools to act are in place. Investment money is accessible. The crisis that makes the case for acting has already arrived. What we are waiting for is the decision.

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council.

matort@yahoo.com