Energy Production and Consumption

In 2004 the Philippines derived 42 percent of its energy from oil; 30 percent from biomass, solar, and wind; 12 percent from coal; 7 percent from geothermal; 5 percent from hydropower; and 4 percent from natural gas. The Energy Development Plan for 2005–14 calls for the country to work toward energy independence by boosting domestic production of oil, gas, coal and doubling the use of renewable sources of energy.

The Philippines has 152 million barrels of oil reserves and 3.7 trillion cubic feet of natural gas reserves. In 2004 the Philippines produced 25,000 barrels of oil per day, but domestic consumption was about 338,000 barrels per day, which meant that the Philippines was dependent on imports for about 92.5 percent of its needs. Consumption of oil has remained relatively stable so far this decade as the Philippines has met growing energy demand with electricity generated from natural gas produced by the Malampaya field in the South China Sea beginning in 2001.

The Malampaya field, which has about 2.6 trillion cubic feet of natural gas reserves, produces about 25,000 barrels per day of natural gas. A deep-water pipeline carries natural gas to an onshore power station. Eventually, three such stations will have a combined capacity of 2,700 megawatts. In 2003 the Philippines consumed 9.6 million short tons of coal, of which 7.4 million tons (77 percent) were imported.

The Philippines is the second largest producer of geothermal power in the world after the United States, and geothermal power accounts for about 50 percent of domestic power generation, followed by hydropower, which accounts for about 33 percent. The development of hydropower through the construction of large dams, however, has been controversial. Its proponents argue that the dams provide flood control, irrigation, and more self-sufficiency in energy. Its opponents argue that the dams destroy valuable natural habitat and displace thousands of local people without adequate compensation. Other power sources are natural gas, coal, and oil.

There are no operational nuclear power plants in the Philippines. The Bataan Nuclear Power Plant, completed in 1985, had its operations suspended in 1986 because of corruption charges, and in 1997 the government decided to convert the idle plant to a natural gas power plant.

The Philippines continues to pursue the privatization of the state-owed National Power Company known as Napocor, but so far the initiative has been plagued by delays. Possible reasons include poor infrastructure and inflated valuations.