The Philippines could save around PHP 1.7 billion (approximately USD 28 million) in coal and gas import costs if it meets its solar capacity target of 9.5 gigawatts (GW) by 2030.
This estimate comes from Zero Carbon Analytics (ZCA), released on May 4, which calculates the potential cost savings from shifting 13.34 TWh of electricity generation from imported fossil fuels to domestically produced solar energy.
Of the total savings, about PHP 1.4 billion would come from reduced gas imports and PHP 269.6 million from lower coal imports. According to ZCA, these savings alone could even fund the Cancer Assistance Fund for vulnerable citizens promised in the Philippines’ 2026 national budget.
Why the Philippines Is Vulnerable to Energy Price Shocks
To understand the significance of these savings, it is important to look at how the Philippines’ power sector is structured. The country had the third-highest electricity tariffs in Asia between 2023 and 2026, after Singapore and Japan.
Several factors contribute to this: inefficient coal-fired power plants, weak grid infrastructure, limited government subsidies for fossil fuel-based generation, and a heavy reliance on imported coal and gas.
What makes the Philippines more vulnerable than many other Asian countries is its electricity pricing mechanism. Based on documents from Manila Electric Company (Meralco), generation costs accounted for around 60 percent of electricity bills for non-lifeline consumers using 200 to 300 kWh per month as of March 2026.
Unlike in tightly regulated electricity markets, where governments absorb excess costs, the Philippines passes generation costs directly on to consumers through electricity bills.
This means that any increase in global coal or gas prices immediately affects household expenses.
These pressures have become even more pronounced amid the recent surge in global energy prices triggered by conflict in the Middle East that disrupted the Strait of Hormuz.
Asian LNG prices reached USD 16.55 per mmBtu on April 24, 2026, up 54.3 percent from February 27. Newcastle coal prices briefly exceeded USD 150 per ton on March 9, 2026, the highest level since November 2024, before easing to USD 133.7 per ton by the end of April.
As a net importer of coal, and with plans to increase gas imports by 8.3 percent annually through 2050, the Philippines is among the most exposed to these global price shocks.
2030 Targets and Ongoing Policy Responses
To achieve the savings projected by ZCA, the Philippines needs to add around 5.8 GW of solar capacity between 2025 and 2030, from its current level of just 3.7 GW. The 9.5 GW target itself represents the most conservative scenario in the Philippine Energy Plan.
Amid the ongoing national energy crisis, the Philippine government has begun accelerating its efforts. As of March 30, 2026, 250 MW of solar capacity had been brought online alongside 450 MWh of battery storage.
A day later, the Department of Energy announced the fast-tracking of 22 power projects to deliver an additional 1,471 MW of renewable energy and storage before the end of the month.
Similar moves are also being observed across other ASEAN countries in response to rising global energy prices. On April 11, Thailand approved a THB 5 billion soft loan program to support the public energy transition, including rooftop solar and electric vehicles.
On April 13, Indonesian energy company PLN said they're planning to swap out over 2,000 diesel generators with a total capacity of 1.07 GW for renewable energy sources. The goal is to cut costs and reliance on imported fuels.
Vietnam is also showing a comparable shift by updating its coal phase-out plans under the Just Energy Transition Partnership framework and reconsidering several new gas projects.
ZCA emphasizes that these short-term measures need to be integrated into long-term policy frameworks to ensure that the Philippines’ energy security and affordability can be sustained over time.
