Energy Strategy in Focus at BusinessWorld Economic Forum
- August 11, 2025
At the BusinessWorld Economic Forum, entitled Unlocking Philippines’ Potential and held in May 2025, experts and leaders examined the Philippines’ economic turning point. While strong domestic demand and a growing workforce offer clear advantages, the country must confront inflation, currency volatility, and global uncertainties. To stay competitive, speakers emphasized the need to boost productivity, modernize infrastructure, and embrace digital transformation.
In this broader context, the country’s long-term energy needs took center stage. With demand projected to rise steadily—growing by an average of 5% annually—national consumption could nearly triple by 2040.
To keep pace, the Philippines will need to boost power generation capacity to over 54,000 megawatts (MW), a sharp increase from the 15,282 MW required in 2020. Ensuring a sufficient, stable, and affordable energy supply will be critical to sustaining growth and supporting future industries.
(Also read: Climate Change Commission Pushes for RE)
Renewables rise, but gaps remain
The Department of Energy (DOE) stated that between 2021 and 2023, the Philippines made steady gains in its shift to cleaner power, growing the share of renewables in its energy mix from 22% to 26%. Over that period, an additional 7,200 MW of renewable capacity came online.
“Based on our multiple committed projects, we have about 9.5 megawatts of solar energy, and we have about 7.5 megawatts of wind,” noted DOE Undersecretary Rowena Cristina L. Guevara. “That’s about 18 megawatts.”
With only 18 MW in committed projects, the current pipeline barely scratches the surface of the country’s overall energy demand, particularly since these projects remain under construction.
However, beyond committed projects, the DOE is monitoring a significantly larger pool of proposals still in preliminary stages, including those under review or in feasibility studies. According to Guevara, current projections indicate that the country remains on track to reach its 35% renewable energy target by 2030.
At the time of the forum, Atty. Monalisa Dimalanta was still serving as Chairperson of the Energy Regulatory Commission (ERC) prior to her resignation in July. She highlighted a 121% surge in net-metering solar installations from 2022 to 2023, as more consumers began generating and selling their power to the grid.
But fresh scrutiny has resurfaced over solar power’s unpredictability following the massive blackout that hit Spain and Portugal in April 2025. With both countries sourcing nearly 80% of their electricity from solar and wind at the time, the outage—Europe’s worst in recent memory—left around 55 million people without power for more than half a day.
Experts pointed to the lack of stable backup sources and overstretched substations as possible triggers. Energy analyst Carlos Cagigal noted that Spain’s nuclear plants were offline during the incident, leaving the grid fully dependent on renewables. This setup may have overwhelmed infrastructure already strained by fluctuating inputs.
The BusinessWorld forum’s panel executives stressed that the real challenge lies not in the speed of adopting clean energy, but in ensuring that systems and the workforce are ready to support the transition. Successfully scaling up renewables, they explained, will require careful preparation to handle the complexities of integration.
(Also read: Dunkelflaute: When Wind Went Silent)
Coal remains in the mix
During the forum, the DOE announced it is drafting a coal transition policy in response to a directive from President Ferdinand R. Marcos Jr. The plan aims to gradually scale down the country’s reliance on coal without compromising grid stability or slowing economic growth.
A year earlier, Meralco Chairman and CEO Manuel V. Pangilinan emphasized coal’s critical role in maintaining energy security. “You have to turn to conventional power plants. Either by coal or by gas,” he said. “These renewables are small. And they’re dependable capacities. The real output is much lower than what they suggest.”
The DOE acknowledged this sentiment, with Guevara noting that the policy will lay out a phased approach to avoid abrupt shifts that could disrupt grid reliability or economic activity.
“While renewable energy has made impressive strides in recent years, the country can’t rely on it entirely yet,” she said. “Transition has to be calculated and calibrated. We do not want this to impact the economic growth of the country by suddenly turning off our coal-fired power plants.”
Meanwhile, the government is ensuring that the shift to cleaner energy does not drive up electricity prices beyond the reach of households and businesses. According to Dimalanta, while climate goals matter, the agency’s priority is to keep power rates reasonable. “It’s not that we are not concerned about our global commitments on emissions, but our main job is to make sure that only reasonable rates are passed on to our consumers,” she explained.
The urgency of nationwide electrification
The government is gearing up for a major campaign to achieve full household electrification. Around 6% of homes across the country remain without power, many of them in hard-to-reach areas or under the coverage of financially struggling electric cooperatives (ECs).
A BusinessWorld analysis of ERC data showed alarming disparities: some cooperatives logged average annual outage durations of over 1,300 minutes—far worse than Meralco’s 130-minute benchmark. Additionally, a 2023 report by the Daily Tribune highlighted how ECs receive preferential subsidies but still underperform, with frequent outages and poor infrastructure investment cited even in tourism hubs.
Several lagging ECs have ceded parts of their service areas to private utilities to improve power reliability. In Iloilo, MORE Electric and Power Corporation took over from Iloilo Electric Cooperatives I and III, upgrading infrastructure and cutting outages. In Batangas, local officials initiated a possible joint venture between Meralco and BATELEC I to address repeated outages. In Davao, persistent complaints led to legislation allowing Davao Light and Power Company to operate in areas formerly under Northern Davao Electric Cooperative (NORDECO).
The DOE estimates that around ₱100 billion will be needed to achieve nationwide electrification. According to Guevara, internal simulations show this investment could generate up to ₱400 billion in economic returns, driven by gains in productivity and income, particularly in rural and underserved communities.
“We believe every peso invested here pays off four times over,” Guevara highlighted. “We hope that when we talk about the energy transition, it should always include full electrification of the country.”
The forum highlighted the fact that energy and the economy are inseparable. A stable, affordable, and inclusive power supply underpins everything from industrial growth to household well-being. As the Philippines advances its energy transition, the real test lies in ensuring that no community is left behind and that the country’s energy systems are strong enough to support long-term economic resilience.
Sources:
https://www.bworldonline.com/businessworld-economic-forum-2025/
https://tribune.net.ph/2024/04/29/mvp-says-coal-stays-as-base-load-option
https://tribune.net.ph/2023/12/electricity-subsidies-to-electric-coops-a-never-ending-burden
https://en.wikipedia.org/wiki/MORE_Electric_and_Power_Corporation
https://www.bworldonline.com/opinion/2024/10/15/627662/nea-batelec-nordeco-and-other-electric-cooperatives
https://mindanews.com/top-stories/2025/04/new-law-allowing-davao-light-to-operate-in-nordeco-areas-unconstitutional
