Coal and Energy Minerals in the Philippines — The Triple Structure of Semirara Island, Import Dependence, and Decarbonization

As of 2026-08-30 · Updated 2026-08-30 · Section: Energy, Power & Waste · 日本語版

Editor's note: This article covers a field in which the site's operating company has business interests. It is compiled from publicly available and primary sources.

0. Three points to grasp first

1. The big picture — the Philippines' coal in numbers

1.1 The skeleton of supply and demand

注 Point of common confusion ①: SMPC's "19.9 million tonnes of production" and "39.9 million tonnes of imports" cannot simply be added together and called domestic consumption. SMPC exports nearly half of its production (see Chapter 4 below). You need "production − exports + imports" to get supply.

注 Point of common confusion ②: Domestic production figures differ across sources. Enerdata puts 2024 lignite production at "15 Mt," which does not match SMPC's disclosed 16.0 million tonnes. This likely reflects differences in classification (lignite vs. sub-bituminous), calendar year vs. fiscal year, and pre- vs. post-washing figures. Always state which agency's statistic is being cited.

1.2 Position in the power mix

On the claim that this is "the most coal-dependent grid in Southeast Asia": Ember's analysis states that the Philippines' share of coal in power generation rose from 59.1% (2022) to 61.9% (2023), surpassing Poland, China, and Indonesia. 注 However, this ranking is based on "share of generation," and by absolute volume the Philippines ranks 17th in the world (Ember, 2023 data). When writing "world's #X coal country," always specify the metric.

2. Resources and reserves — do not confuse the definitions

The most misused number in Philippine coal is "2.5 billion tonnes."

注 Point of common confusion ③: - "Resource potential (endowment)" = the amount believed, on geological grounds, to exist. Does not consider economic viability or technical mineability. - "In-situ reserves" = an intermediate concept used by DOE. The amount confirmed within the strata by drilling, not the amount that can simply be extracted as-is. - "Mineable/recoverable reserves" = the amount that can actually be mined and recovered. Comes to a sixth or less of the figure above it.

On reporting standards: These DOE figures are government estimates and are not based on international public reporting standards such as JORC or NI 43-101. The only JORC-compliant material confirmed for SMPC is an independent technical review by Minarco Asia Pacific in November 2004 (proven/probable mineable reserves of 52 million tonnes at the Panian mine, in-situ coal of 210 million tonnes) and a mention of JORC-standard confirmatory drilling conducted in 2006 under the supervision of an Australian consultancy. No JORC-compliant resource statement as of 2026 could be confirmed in this research.

Major coal districts

19 coal districts (coal districts), dating from a 1977 survey, form the administrative units. The major ones are as follows.

注 The Philippines' coal seams are highly folded and faulted, with poor continuity. They are also scattered across islands, making infrastructure development difficult. This is the geological reason large-scale development has not advanced outside Semirara Island.

3. Semirara Island and SMPC

3.1 Corporate structure

SCPC's 2×300 MW units were acquired from the government (PSALM) in 2009 for US$362 million. SMPC is described as the country's only vertically integrated power company that owns both a coal mine and coal-fired power plants.

3.2 Production and results

(Sources: SMPC's PSE disclosures and various March/April 2026 press reports)

The 2025 production increase reflects improved access to the coal seams at the Narra mine and ECC amendment approval from DENR in May 2025 for annual production of up to 20 million tonnes. 2025 revenue was ₱52.23 billion (−20%).

The power business sold a record 5,296 GWh in 2025 (+7%), at an average selling price of ₱4.38/kWh (−8%). 54% of sales went through the spot market (WESM), 46% through bilateral contracts.

3.3 The scale of open-pit mining and the shifting of pits

Semirara Island's operation is a large-scale open-pit mine. The area covered by Coal Operating Contract (COC No. 5) is about 13,000 ha, of which the project area was expanded to 5,221.75 ha under the June 2025 ECC amendment.

The Narra mine was temporarily suspended in 2019 due to water seepage and resumed in October 2022. The deposit extends below sea level, and CEO Consunji has said it requires special techniques, with a remaining mine life of around 10 years (2026 press reports).

SMPC has submitted a five-year, roughly ₱291.4 billion (about US$5.07 billion) expansion plan to DENR. 注 However, due to the contract-expiration issue discussed below, 2026 capital expenditure was cut by about 70% year-on-year.

3.4 The 2013 and 2015 slope-collapse accidents

Two incidents that cannot be omitted when discussing the Philippine coal industry. Both occurred at the Panian pit.

Government response: In the 2013 case, DOE ordered several weeks of suspended operations, then found no fault and permitted a full resumption in June 2013. In the 2015 case, DOE again ordered operations suspended for investigation. SMPC pledged ₱1 million per victim's family in support, plus scholarships and housing assistance.

Other fatal accidents have continued to be reported (September 2016: 3 drowned from gas inhalation inside a barge at the pier / October 2019: 1 death from a landslide at the Molave pit / July 2020: 1 death from a limestone rockfall near the Narra pit, and others).

注 Point of common confusion ④: SMPC's record includes both cases where it was found "not at fault" and cases where it faced suspension orders. Japanese-language articles that lump these together as "the company was sanctioned" are inaccurate.

3.5 The 2027 contract expiration and competitive bidding — 2026's biggest issue

This is the single most consequential, fast-moving issue as of 2026.

Reserves offered for bidding (government-stated)

注 These "160 million tonnes / 207 million tonnes" figures are estimates presented by DOE for the bidding process, and whether they comply with JORC or similar standards could not be confirmed in this research.

Secretary Garin said in August 2026 that "SMPC mainly exports its coal, and only a portion is for domestic power plants. Any shortfall can be met through domestic sourcing or imports," downplaying the risk of any temporary operational stoppage.

4. The paradox of "a coal-producing country that imports"

4.1 Why domestic coal isn't used domestically

In other words, imports serve not only to "fill a volume gap" but also as a blending material to meet quality specifications. Omitting this point makes the structure impossible to explain.

4.2 SMPC's export structure

Of 2024 sales of 16.5 million tonnes, the breakdown was roughly 8.0 million tonnes domestic / 8.4 million tonnes exports (about 48:52). Most domestic sales went to SMPC's own Calaca power plants (SCPC, SLPGC) and to cement plants (of which 20% went to affiliate Cemex Holdings Philippines).

注 Point of common confusion ⑤: Writing only "the Philippines imports coal" is a half-truth. In reality, both imports and exports are large. The country's largest domestic producer exports to China while domestic power plants import from Indonesia.

5. Coal-fired power and the moratorium

5.1 The content of the 2020 moratorium

5.2 Effectiveness — the loopholes widen (2025–2026)

Conclusion: The moratorium is a policy of "no new permits," not a policy to reduce coal-fired power. Projects approved as of 2020 (estimated by DOE at up to about 20 GW-equivalent) continue to move forward, and the October 2025 circular formally expanded the categories of exemption. Gerry Arances, executive director of CEED (Center for Energy, Ecology, and Development), has criticized this, saying "every time an exemption is added, DOE undermines its own policy goal," and Manila Bulletin (October 2025) described it as "the quiet burial of the moratorium policy."

6. Why the Philippines can't move away from coal

Grid strain (a 2026 case)

On May 13, 2026, NGCP declared the first Red Alert of 2026 across both the Luzon and Visayas grids.

Rolling blackouts hit over 200,000 Meralco customers (averaging about 3 hours). DOE and ERC ordered NGCP to submit an incident report. This grid strain directly fueled the debate over revisiting the coal moratorium.

7. Decarbonization pressure and the Energy Transition Mechanism (ETM)

7.1 What is the ETM?

The Energy Transition Mechanism (ETM) is a public-private initiative launched by the ADB (Asian Development Bank) in 2021. It uses blended finance combining concessional loans, equity, and guarantees, structured around two funds: ① a fund for the early retirement and repurposing of coal-fired plants, and ② a fund for new investment in clean energy. Partnerships have been established with the ADB, Indonesia, and the Philippines.

7.2 The SLTEC case (the world's first ETM transaction)

Caution: The legally binding commitment remains 2040. 2030 is a conditional aspirational target — "if transition credits become commercially viable." Many Japanese-language articles conflate the two.

7.3 STEAG Mindanao (a government-owned asset)

注 No information confirming that a transaction was concluded in 2026 could be found in this research. The 2026 early-retirement target has, in effect, slipped.

Criticism: urgewald has pointed to structural flaws in how the ETM operates in practice, including "a lack of transparency, incentives skewed toward the private sector, and a failure to integrate fairness and local participation."

8. Coal prices and their pass-through to electricity rates, 2025–2026

8.1 Coal benchmark prices

(2024 and 2025 averages from SMPC's PSE disclosures. 2026 figures from Trading Economics / ESDM announcements as reported in the press)

Drivers of 2026 price movements: In Q2, the Iran-US clash, Strait of Hormuz risk, and Indonesian export restrictions drove Newcastle prices to their highest level in years; a provisional agreement in June eased tensions and prices fell to a four-month low, before Indonesian supply disruptions in late July (low water on the Barito River disrupting barge transport, with some mines declaring force majeure) pushed prices back up to US$130–136/t. In August, prices were roughly flat around US$130 amid factors including India's increased production (July coal output of 69.75 million tonnes, up +7.51% year-on-year).

注 Point of common confusion ⑥: HBA is a lagging indicator based on shipments from a month earlier (used for royalty calculations) and does not match the spot price. When writing about "the price of Indonesian coal," always specify whether it's HBA, ICI, or an FOB spot price.

8.2 Pass-through to electricity rates (Meralco, 2026)

Key upward drivers (per Meralco) - The prolonged impact of Middle East tensions on the global energy market (the PSA component contributed +₱0.2678/kWh, reaching ₱8.8694/kWh) - A weaker peso: April's +₱0.5257 was mainly due to a weaker peso (the applicable exchange rate for the March supply month rose more than ₱3 to ₱60.748). 99% of First Gas / Prime CoreGen's costs are dollar-denominated - WESM spot: On May 28, 2026, Luzon demand hit a record high of 14,534 MW, pushing the spot price to ₱8.0337/kWh. The secondary price cap was triggered in 11.1% of all hours - Meralco's power mix: First Gas/Prime CoreGen 22%, PSA 72%, WESM 6%

注 The factors Meralco cites for 2026 are centered on gas (LNG), a weaker peso, and spot prices, and it has not singled out "rising coal prices" as an independent driver. Coal costs pass through with a time lag via bilateral PSAs, so movements in coal indices do not show up in rates immediately.

9. Coal excise tax

9.1 Current level

The trajectory of the coal excise tax under the TRAIN Law (Republic Act No. 10963).

• The rise from ₱10 to ₱150 is a 1,400% increase.
• A 12% VAT is also applied on top of the excise tax.
• Under the TRAIN Law, ₱150 is the final rate, with no further scheduled automatic increases (as of a 2023 policy brief from the House Committee on Ways and Means' policy research office, CPBRD, it remained at ₱150). No enacted law changing this could be confirmed as of August 2026.
• Original impact estimates at introduction: an initial impact on electricity rates of ₱0.04/kWh, rising to ₱0.07/kWh once the ₱150 rate was reached, with a total consumer pass-through estimated at ₱13.2 billion (an estimate from 2017–2018). At the earlier ₱50 stage, DOE reportedly considered a "no pass-on" policy requiring generation companies to absorb the cost.

9.2 The 2026 debate

Conclusion: As of August 2026, raising the coal excise tax remains at the stage of an external OECD recommendation and cannot be confirmed as a government-sponsored bill.

10. Summary of unconfirmed points and cautions

11. Glossary of key terms

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