Energy mix in the PhilippinesFossil fuels such as coal, oil, and natural gas have been powering the Philippines for years, supplying about 80 percent of the country’s energy needs. The Philippines produces fossil fuels to meet its growing energy consumption, although it remains a net energy importer. Coal production shows an increase in the recent period, except for a slight decline in 2020. However, due to increasing demand, it heavily imports coal, mainly from Indonesia. Meanwhile, its oil refining capacity has been declining in recent years after the permanent closure of one refinery plant. Natural gas supply, primarily sourced domestically, is also facing supply depletion in 2024, forcing dependency on LNG imports. Despite foreseen challenges, the country aims to be energy self-sufficient in 2030.
With its abundant renewable energy sources, the Philippines aims to transition to sustainable energy as it faces challenges in fossil fuel supply and rising energy prices. Across all sustainable energy sources, the country has an abundant geothermal energy supply, ranking fourth worldwide. The country also has an ample hydropower supply, alongside increasing solar, biomass, and wind power capacity. Overall, the Philippines' renewable energy sources had a total power generation capacity of over 7.62 thousand megawatts in 2021. This puts the electricity capacity of sustainable energy at 27.6 percent in 2021. The country aims to increase renewable energy capacity in the coming years by expanding its commercial renewable energy projects and easing foreign ownership limits to boost investment.
Understanding the Philippines’ energy landscapeThe Philippine electricity sector underwent privatization upon implementing the Electric Power Industry Reform Act of 2001 (“EPIRA”). As a result, electricity generation, transmission, and distribution were transferred to the private sector to liberalize and unbundle the power sector and promote competition. The current electrification rate now stands at 94.5 percent.
The electricity distribution system was composed of private investor-owned utilities, electric cooperatives, local government unit-owned utilities, and multi-purpose cooperatives, all of which were allowed to sell and provide electricity within their franchise areas. The largest distribution franchise in the country was owned by the Manila Electric Company (Meralco), which provided electricity across Metro Manila, including the whole of the National Capital Region and Mega Manila.