Philippines set for first coal power decline in 17 years amid rising LNG use

The Philippines is on track for an annual decline in coal-fired electricity output for the first time in nearly two decades, an analysis of market and government data showed, driven by rising liquefied natural gas (LNG)-fired power generation.

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The Philippines has the most coal-dependent grid in Southeast Asia but its electricity tariffs, which are not subsidized, are the second highest in the region behind Singapore. The archipelago’s liberalized market enables power retailers to pivot to LNG, analysts say, unlike in Indonesia and Malaysia, where cheap coal keeps subsidies manageable.

Gas-fired generation surged more than 25% in June year on year and rose 5.2% to 10.36 terawatt-hours (TWh) in the first half of this year, data from the Independent Electricity Market Operator of the Philippines IEMOP) showed.

That helped push the share of gas-fired power output to 17.5% in the first half of 2025, up from a record low of 13.9% in 2023, which was due to depleting reserves at the key Malampaya field, according to government data dating back to 2003.