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Philippine Standard Time

Issue Paper

Historically, the Philippines’ energy sector has been reliant on fossil fuel. In fact, the share of environmentally harmful fossil fuel in the country’s generation mix remains largely unchanged at approximately 75 percent, derived mainly from coal power plants. This, despite the promulgation of the Renewable Portfolio Standards (RPS) in 2017, which requires electricity producers to source or generate at least 35% of their electricity requirements via renewable energy (RE) sources (i.e., geo-thermal, solar, wind, and bio-energy resources). Further, the Philippines is becoming more dependent on imported coal for its power needs, with imports increasing to 27.7 million tons in 2019 from 26.3 million tons in 2018.

Beyond the negative effects on environment and public health of the use of fossil fuels as energy source, the massive importation of fossil fuels has led to various negative impacts on the Philippines’ economy: inflexibility, price fluctuations, and a downward pressure on the balance of trade. Coal imports in 2019 accounted for 7% of the country’s annual trade deficit (Ahmed, 2020; Oxford Business Group, 2021).

Researcher: John Emmanuel B. Villanueva

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