Philippines Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in Philippines, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals.
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Overview

The Philippines is implementing its Philippine Energy Transition Strategies under the Philippine Energy Plan for 2023 to 2050. The energy transition aims to ensure access to affordable energy, reliability and resiliency, and energy security. This transition comes at a critical time, as the country faces mounting energy demand, rapid economic growth, and the looming depletion of its domestic Malampaya gas field. The Philippines is accelerating its energy transition – transforming its natural gas supply landscape and opening major opportunities for U.S. suppliers of energy infrastructure.

The country’s current energy mix in 2023 consists of coal (43.8 percent), natural gas (13.2 percent), renewable energy (29 percent), and oil-based solutions (13.2 percent). While the country has indicated an interest in clean energy, this will not come at the expense of development, and there are no penalties or disincentives in place for utilizing different types of energy sources.  The electricity sector is fully privatized, with one major utility, Meralco, holding 80 percent market share. The remaining 20 percent is made up of a few regional players and 100+ electric cooperatives serving the island configuration.

The need for energy solutions and new equipment exists, but larger players make purely commercial decisions that favor lower-cost solutions in the near term, and the smaller players are often unable to purchase U.S. solutions over the long term.
The Philippine government expects energy demand to increase by more than 5 percent on average per year, growing to 68.5 GW in 2050, nearly four times current peak demand. For a country already facing frequent rolling blackouts in rural areas during the dry season, the government is racing to add new capacity before the energy shortfall is felt in large urban centers, including Metro Manila, Cebu, and nearby industrial hubs.

Market Opportunities

Liquefied Natural Gas

Natural gas is playing an increasingly prominent role in the country’s power generation mix, now accounting for 22 percent of its power generation. As a result, imports of liquefied natural gas (LNG) have risen, making up 46 percent of its natural gas feed stock. The Philippines’ LNG demand is estimated to rise from 1.7 gigawatt (GW) in 2023 to 11.3 GW by 2040. As a reliable transition fuel, natural gas helps maintain baseload capacity, stabilize the grid, and support renewable energy integration. The Philippine power sector is driven by private companies, which are now strategically shifting toward imported LNG, leading to the development of critical infrastructure such as import terminals, storage facilities, regasification plants and downstream distribution or small-scale LNG.

In January 2025, the Philippines approved the Philippine Natural Gas Industry Development Act (Republic Act No. 12120), which established a comprehensive framework for the use of natural gas. The law includes fiscal incentives and value-added tax exemptions to attract investment. While implementing rules and regulations do not prohibit the importation of LNG, private generation companies are required to procure an unspecified share of their supply from natural gas. To offset declining indigenous production, Philippine energy firms have accelerated LNG infrastructure expansion. The Philippine Department of Energy (DOE) also plans to implement an aggregation process that combines indigenous and imported gas purchases to lower costs and ensure supply stability. 

The Philippines is currently importing LNG on a spot basis through two terminals with total capacities of around 8.26 million tons per annum (MTPA) in the southern part of the country. U.S. LNG suppliers are encouraged to start discussions in securing long-term supply contracts. Philippine buyers currently rely on spot market purchases through 2025, with plans to transition to index-based pricing under long-term contracts in the third year.

Civil Nuclear

The idea of pursuing nuclear energy for power generation is not new for the Philippines. There is an existing 623-megawatt (MW) Bataan Nuclear Power Plant (NPP) built in 1984 that was mothballed in 1986 due to post-Chernobyl political and safety issues that emerged during the change of government administration. Small modular reactors (SMRs) are defined by the International Atomic Energy Agency as newer generation reactors designed to generate electric power typically up to 300 megawatts (MW) with components and systems. The Philippine power industry, which is privatized and owned by the largest conglomerates, anticipates that the Philippines will need to consider developing a long-term supply chain that can support SMR technology (light water reactors) in the near term and advanced SMR technologies (molten salt reactors) in the more distant timeline.

Nuclear, along with imported liquified natural gas (LNG), is seen as the most viable long-term base load fuel sources. The Philippines has a 123 Agreement with the United States that was concluded in 2023. The passage of additional civil nuclear legislation will establish regulatory frameworks on nuclear energy. On September 18, 2025, President Marcos signed the PhilATOM bill into law, establishing the country’s first independent nuclear regulator and a comprehensive legal framework for civil nuclear energy. This landmark legislation creates the enabling environment for U.S. civil nuclear companies to invest in the Philippine market.

Opportunities exist for U.S. companies offering complete packages of nuclear energy generation systems (reactor, steam generators, pumps), deep borehole drilling technologies for spent fuel disposal, civil nuclear gap analysis services and full civil nuclear energy supply chain.

Power Generation

There are more than 70 power generation companies involved in various stages of power plant rehabilitation, upgrading, and regular maintenance work. This presents a range of opportunities for supplying equipment and services. Large conglomerates are rebalancing their thermal/coal power assets with more renewable resources and the utilization of more efficient technologies including robotics and super critical technologies. As the market is fully privatized, these firms make decisions based on price and the need for diversification.

Distribution and Transmission

Solutions are needed for the main grid, and new projects for distribution systems are required to incorporate new energy sources. Smaller utilities must enhance their capabilities but require expertise and investment to increase grid modernization and resiliency. The DOE and Energy Regulatory Commission mandate that all distribution utilities undergo a competitive selection process (CSP) to secure power supply agreements (PSA).  

Resources

Contact Information

Thess Sula, Commercial Specialist, U.S. Commercial Service Philippines

Email: Thess.Sula@trade.gov  

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