Geothermal Energy and Underground Renewable Resources in the Philippines — Why the World's No. 3 Geothermal Power Struggles to Grow

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. How to Use This Document (A Shared Note on Number Definitions)

Discussions of underground resources go wrong easily when different "types" of numbers get mixed up. The following cautions apply equally to geothermal energy, groundwater, and CCS.

注 Pitfall #1: The "roughly 4,000 MW (4,054 MW / 4,064 MW)" figure frequently cited for Philippine geothermal is a resource potential, not a confirmed reserve guaranteed to materialize once drilled. Market overviews and related literature published by ThinkGeoEnergy repeatedly frame the actually confirmed scale as roughly the 2,500 MW class, with the existing major fields (Tiwi, Mak-Ban, Palinpinon, Tongonan) already largely commercialized (source: ThinkGeoEnergy / the ScienceDirect chapter "The Philippines: Antecedents and Perspectives of the Third Largest Geothermal Power Market." The original primary-source text could not be confirmed).

注 Pitfall #2: Reporting standards used for mineral resources, such as JORC or NI 43-101, do not apply directly to geothermal energy. Geothermal resources are assessed using the "stored heat / volumetric method" or numerical simulation, and international classification frameworks such as UNFC exist, but most figures published in the Philippines are estimates from the government (DOE) or PNOC-affiliated agencies, or claims made by operators. This is a different kind of information from a third-party-audited mineral reserve report.

注 Pitfall #3: "World No. 2 / No. 3" is almost always a ranking by installed capacity (MW). The ranking can shift when measured by generation output (GWh) or by share of the power mix. Rankings also vary by several hundred MW depending on the data source (ThinkGeoEnergy / Global Energy Monitor / national governments).

1. The Philippines' Global Standing (as of Year-End 2025)

The global geothermal installed-capacity ranking at year-end 2025, published by ThinkGeoEnergy, is as follows.

(Source: ThinkGeoEnergy, "Global Top 10 Geothermal Power Countries at Year-End 2025")

• The top 10 countries account for over 93% of global installed capacity.
• The Philippines' 2025 increment came from the new Tanawon plant within the BacMan II complex.
• 注 For the same year-end 2025 point, citations also circulate putting the US at 3,734 MW (on a Global Energy Monitor basis). The US figure swings by more than 200 MW depending on the source, but every source agrees the Philippines ranks third.

How It Slid from No. 2 to No. 3

Energy Secretary Sharon Garin said in 2025, regarding the decline in ranking, "The risks are too great. That's why we fell from world No. 2 to No. 3" (source: ThinkGeoEnergy / Philippine News Agency). The government has set reclaiming second place as a goal.

2. Standing in the Domestic Power Mix — Installed Capacity and Generation Share

Installed capacity (DOE-based data)

(Sources: various news reports citing DOE compilations; BOI "Renewable Energy" industry profile, March 2025; Manila Bulletin, August 11, 2026)

Geothermal's Share of the Power Mix

注 Pitfall #4: The website of the National Geothermal Association of the Philippines (NGAP) still states "about 1,984 MW installed, over 17% of the power mix." But that 17%-plus figure is a level from around 2005; actual results in the 2020s sit in the 8–9% range. A Japanese-language article that writes "geothermal is 17% of the Philippines' power" would be citing a number that is 20 years out of date. Because installed capacity stayed flat while total demand grew, the share roughly halved.

3. Major Geothermal Fields and Power Plants

Philippine geothermal fields fall broadly into four groups: Luzon (Tiwi, Mak-Ban, BacMan, Maibarara), Leyte (Tongonan-Leyte), Negros (Palinpinon), and Mindanao (Mt. Apo).

3-1. Overall Map (Seven Major Fields)

注 On "Paranas": This research could not confirm any public information supporting the existence of a geothermal service contract or power plant at Paranas, Samar Province. Nothing matching it appears in the DOE's geothermal project listings (February/April 2025 editions) either. It should be treated as unconfirmed, and if written up, the possibility of a name mix-up (with Palinpinon, Palayan, Southern Leyte, etc.) should be suspected. Note that the "Southern Leyte Geothermal Project (25 MW)" that PGPC won in June 2026 is a project in Southern Leyte Province, not on Samar Island.

3-2. EDC's Geothermal Portfolio (Plant Details)

EDC (Energy Development Corporation) is the largest player, accounting for about 56% of domestic geothermal capacity.

(Sources: EDC / First Gen disclosures, ThinkGeoEnergy, BusinessWorld 2025, Daily Tribune, August 1, 2025)

EDC's ongoing investment - A ₱30 billion (approx. US$510 million) 40-well drilling program. Targets: 29 MW in 2024, 54 MW in 2025, and a cumulative +85 MW by 2026. As of June 2025, 29 of the 40 wells were complete. - Mahanagdong Binary (28 MW) and three battery storage projects (totaling 40 MWh: BacMan 20 MWh, Tongonan 10 MWh, Negros 10 MWh) are planned within 2025. - In August 2025, a plan to expand the BacMan complex by 90 MW was announced (BusinessWorld, August 4, 2025). - Amacan (Mindanao / Davao de Oro): a greenfield site won through a 2017 DOE competitive bidding process. First Gen President Francis Giles Puno said he expects 70–100 MW. EDC CEO Jerome Cainglet said the project requires an investment of about US$6 million per MW, that a commerciality decision will come in 2026, and that construction after that would take two to three years. If realized, it would be Mindanao's second geothermal project since Mt. Apo (1997).

3-3. Aboitiz Power (APRI) — Tiwi and Mak-Ban

注 Pitfall #5: The gap between "nameplate capacity" and "actual output" is extremely large in Philippine geothermal. Tiwi's nameplate is 289 MW against actual output of about 118 MW (roughly 40%). This is due to reservoir decline, scaling, and well aging, and converting a "Philippine geothermal capacity of XX MW" figure directly into generation output will almost always overstate it.

3-4. The Chevron Exit (an Important Structural Shift)

The result is a settled split structure: "surface power plant = Aboitiz (APRI) / underground steam = SM (PGPC)." This is a point Japanese-language articles often get wrong — Tiwi and Mak-Ban are "Aboitiz's geothermal power plants," but the entity developing the reservoir is SM-affiliated PGPC.

3-5. PGPC's (SM Group's) Offensive — The Biggest Moves of 2025–2026

• In 2025, exploration drilling began at Mt. Malinao (Albay Province) using PGPC's newly built rig "Pioneer 1." The plan envisions 49 MW initially, with up to 300 MW from the surrounding area feeding into the Luzon grid.
• Exploration targets are six areas: Daklan (Benguet), Baua-Sikaw / Cagua-Baua (Cagayan), Mt. Labo (Camarines Norte), Kalinga, Southwest Kalinga, and Mt. Malinao. ₱3 billion has been budgeted for initial exploration, with a target of unlocking an additional 250–400 MW.
• On June 1, 2026, per a notice from Secretary Garin, PGPC was named the winning bidder for Predetermined Area 2 (PDA-2) of the 5th Open and Competitive Selection Process (OCSP5) — the Southern Leyte Geothermal Project (potential 25 MW) (sources: Philstar, June 6, 2026; Inquirer Business).
• Under OCSP5, a total of nine RE projects (combined over 50 MW) advanced to detailed evaluation, with bid opening on March 30, 2026.

3-6. Other Projects

4. Why Growth Has Stalled — Five Structural Factors

4-1. Exploration Risk and Upfront Investment

Unlike solar or wind, the fact that a dry hole means a total loss is the biggest barrier for both companies and banks. First Gen Senior Vice President Jay Joel Soriano said, "The government has treated geothermal as an 'old technology.' That's why it went without support for a long time" (Philstar, October 29, 2025).

4-2. Many Promising Sites Sit Inside Protected Areas (NIPAS / E-NIPAS)

注 Pitfall #6: Writing that "the Mt. Apo geothermal facility is inside a national park" is inaccurate. RA 9237 carves the geothermal area out of (excludes it from) the park core and treats the surrounding area as a buffer zone. The park core covers 54,974 ha, with a 9,078-ha buffer.

注 Conversely, if a promising new site falls within a legally established protected area post-E-NIPAS, commercialization requires coordination at the legislative level. This is a regulatory risk layered on top of exploration risk.

4-3. Relations with Indigenous Peoples (IPRA / FPIC)

• Under RA 8371 (the Indigenous Peoples' Rights Act, IPRA, 1997), development on ancestral domain requires Free, Prior and Informed Consent (FPIC) obtained through the National Commission on Indigenous Peoples (NCIP).
• Mt. Apo: A sacred site for the Obu Manuvu (Manobo) people. 1980s plans faced fierce opposition, but a compromise was reached through royalty agreements with landholders and environmental/economic commitments. In recent years, as expansion plans reach into new ancestral domain, the tribe has demanded greater involvement in governance (Mongabay, December 2021). Some argue that "obtaining FPIC alone is not enough — discussions should start from whether an exception can be recognized as an Indigenous and Community Conserved Area (ICCA)."
• Kalinga: In 2012, the Uma people of Western Uma, Lubuagan, physically blocked a Chevron survey team. The Cordillera Peoples Alliance (CPA) pointed to deficient FPIC procedures, the provoking of inter-tribal conflict, and intensified military operations in related areas. Opposition also extends to the Southwest Kalinga and Mainit-Sadanga (Mountain Province) geothermal projects.
• Promising Philippine geothermal areas are concentrated in the Cordillera region and Mindanao, which are simultaneously areas dense with indigenous ancestral domain. This geographic overlap is a structural constraint.

4-4. Coordination with Host Local Governments and Revenue Sharing

Under RA 9513 (discussed below), the government share of geothermal revenue is 1.5% of gross income. This is split 60% national / 40% local, and 80% of the host local government's share is mandated to fund electricity-bill subsidies for residents. The direct local benefit thus takes the form of electricity discounts rather than discretionary local government revenue, which narrows the bargaining chips available for building local consensus.

4-5. Policy Priorities

• Geothermal was excluded from the Green Energy Auction Program (GEAP) for a long time. First Gen has claimed it "had to wait four rounds before a geothermal contract was included."
• Indeed, only 30.9 MW was allotted to geothermal under GEA-3 (well below the envisioned 100 MW), split between EDC's Mindanao 3 and Bago binary (9.3 MW combined) and Bac-Man Geothermal Inc.'s Tanawon (21.5 MW). Delivery period 2025–2027.
• GEA-4 (awarded November 2025, 10.2 GW total) had zero geothermal (2.2 GW onshore wind, over 4.1 GW ground-mounted solar, 2.3 GW floating solar).
• GEA-5 is dedicated to offshore wind. It began November 2025, with bids submitted August 2026. The ERC approved a GEAR ceiling price of ₱11.00/kWh on February 23, 2026.
• Geothermal becomes eligible again only under GEA-9 (planned 2027: biomass, geothermal, solar, hydro, onshore wind). On February 13, 2026, the DOE announced a 10-year pipeline putting a combined 25 GW out to auction through 2035.

5. The Legal Framework — RA 9513 and Foreign Ownership Rules

5-1. Incentives Under the Renewable Energy Act (RA 9513, 2008)

Whether it has been amended (confirmed 2026-08-26): No Republic Act amending RA 9513 could be confirmed (no entry for "amending ... 9513" in LawPhil's 2023–2026 RA listing; bills expanding net metering and rooftop solar are under Senate deliberation, with a joint hearing held April 30, 2026). What has changed is not the law itself but the overlapping layers of implementing rules and tax regimes. - DOE Department Circular DC 2022-11-0034 (signed 2022-11-15 / effective 2022-12-08) amended the IRR to remove the foreign-equity restriction (see 5-2 below). It did not amend the law itself. - 注The tax incentives in the table below are grounded in RA 9513 Section 15, but they overlap with the reorganization of incentive regimes under RA 11534 (CREATE, 2021) and RA 12066 (CREATE MORE, 2024-11-11). This review could not confirm that "the CREATE-family laws expressly repealed RA 9513 Section 15" — the mainstream explanation treats the two regimes as an elective choice. Check with a tax professional on applicability to any specific project; do not use the table below alone as a current, definitive tax conclusion.

Procedure: registration/accreditation with DOE-REMB → DOE Certificate of Endorsement → BOI registration. BIR Revenue Regulation No. 7-2022 (June 22, 2022) established the operational guidelines.

Government share (Sec. 13): 1% of gross income for RE generally; 1.5% for geothermal ("indigenous geothermal") alone. Community-scale micro projects of 100 kW or less are exempt, and biomass carries no government share.

5-2. The 2022 Opening to 100% Foreign Equity — Geothermal Is "Excluded"

注 Pitfall #7 (the most important one on this topic): "The Philippines opened renewables to 100% foreign ownership in 2022" → "so geothermal can also be entered with 100% foreign equity" is wrong. Geothermal remains subject in principle to 60% Filipino ownership. In its own explanation of the 5th Open and Competitive Selection Process (OCSP5), the DOE explicitly states, "OCSP contracts are open to both Filipino and foreign companies to bid on. Geothermal is an exception, however, requiring a corporation at least 60% Filipino-owned and Filipino-controlled."

5-3. The Exception Route = FTAA (Large-Scale Geothermal)

注 In practice, then, foreign entry comes down to two options: (1) presidential approval as an FTAA project exceeding US$50 million, or (2) a joint venture with a 60% Philippine partner. Chevron's 40% stake in PGPC reflected this constraint.

5-4. The 2025–2026 Headline — The Geothermal Resource De-Risking Facility (PGRDF)

The resumption of greenfield drilling at Amacan (EDC) and Mt. Malinao (PGPC) is cited as a direct result of this scheme.

Related event: The 7th Philippine International Geothermal Congress, themed "Sharpening the Geothermal TIP: Technology, Investment, and Policy," is scheduled for September 2–4, 2026, in Lipa City, Batangas.

6. Targets — How High Does the Government Want to Go?

注 Market analysts, meanwhile, are less optimistic. Because "confirmed geothermal reserves are largely already commercialized, and unconfirmed resources sit in harder-to-access locations," one outlook projects geothermal's generation share falling to 8% by 2030 and 4% by 2040 (per a market overview published by ThinkGeoEnergy). That is a large gap from the 3,000 MW target.

注 Pitfall #8: Even as of August 2026, while geothermal is relied on as a "stable power source" in grid operations, outages also have a large impact. In August 2026, the shutdown of Cebu Private Power Unit 10 and a drop in Leyte-A geothermal output contributed to extending a yellow alert on the Visayas grid.

7. Other Uses of the "Underground" Besides Geothermal

7-1. Groundwater and the Sinking of Metro Manila

In other words, the "rate of sinking" around Metro Manila is 10 to 30 times the pace of sea-level rise from global warming. UP researchers (Fernando Siringan, Carlo Arcilla) have concluded that "the main cause of Manila sinking is not warming but the over-extraction of groundwater for household and commercial use."

Regulatory framework

Saltwater intrusion is also severe. Chloride concentrations exceed drinking-water standards in shallow layers and the upper confined zone along the Manila Bay coast. In the Marikina Valley, saltwater is reached at depths below 180 m; east of the Pasig-Marikina river confluence, it is reached at around 50 m. Seepage from the Pasig River is also a pathway.

注 Pitfall #9: The 2022 opening to 100% foreign equity does not extend to "groundwater." The Department of Justice held that inland waters such as rivers and lakes are depletable resources, so the Water Code's nationality requirement continues to apply (ocean and tidal power are treated as excluded from it). Writing that "the Philippine water business is open to 100% foreign ownership" is incorrect.

7-2. CCS (Underground Carbon Storage) — Still at the Study Stage

注 Pitfall #10: Writing that "CCS projects are moving forward" in the Philippines is currently incorrect. Neither the legal framework, a regulator, nor a permitting system is yet in place; the situation remains at the level of regional studies and a legislative inquiry. It should not be treated on the same footing as Malaysia or Indonesia.

7-3. Direct Use of Low-Temperature Geothermal

ThinkGeoEnergy and others point out that the Philippines has low-temperature geothermal resources (low- to medium-enthalpy) that remain untapped. Direct use for drying, refrigeration, bathing, and the like, and small-scale binary generation, are technically feasible, and binary projects that use residual brine heat — Palayan Binary (29 MW), Tanawon (22 MW), Tiwi Binary (17 MW), Mahanagdong Binary (28 MW) — have in fact been at the center of the 2024–2025 increment. The real picture for the 2020s is that future growth potential lies less in "new large-scale fields" and more in "optimizing existing fields plus binary generation."

8. Summary — 10 Key Points to Remember

1. The Philippines ranks world No. 3 in installed capacity at 2,034 MW (year-end 2025, ThinkGeoEnergy). No. 1 is the US at 3,953 MW, No. 2 is Indonesia at 2,742 MW. It was overtaken by Indonesia in 2018.
2. Geothermal's share of the power mix is about 8% (April 2025–March 2026). "17%" is an old figure from around 2005 that still lingers on an industry association's website, so it is frequently miscited.
3. The "roughly 4,000 MW" figure is a resource potential, not a confirmed reserve. The harsh reality is that what has been confirmed is largely already commercialized.
4. Surface (power plant) and subsurface (steam) are split. At Tiwi and Mak-Ban, Aboitiz (APRI) generates power while SM-affiliated PGPC supplies steam. Chevron exited in the late 2010s.
5. EDC (First Gen / Lopez Group) accounts for about 56% of domestic geothermal capacity, holding Leyte, BacMan, Palinpinon, and Mt. Apo.
6. Geothermal is not included in the 2022 opening to 100% foreign equity (DC 2022-11-0034). Geothermal remains subject in principle to 60% Filipino ownership; 100% foreign equity is available only through the separate FTAA route for projects over US$50 million (2020 OCSP3).
7. Protected areas (the E-NIPAS Act, RA 11038, 2018), indigenous FPIC (IPRA, 1997), local government coordination, and exploration risk (US$6–12 million per well) are the four major factors behind the stagnation.
8. Starting Q1 2026, the ADB-funded US$170 million "Philippine Geothermal Resource De-Risking Facility (PGRDF)" is operational, covering 50% or more of drilling costs through conditionally repayable grants.
9. Actual developments in 2026 include PGPC's Mt. Malinao exploration and its win of the 25 MW Southern Leyte project (June), EDC's Amacan commerciality decision, and Maibarara's 2026–27 drilling campaign (starting September). Geothermal returns to the auction only with GEA-9 (2027).
10. As a separate underground issue, land subsidence around Metro Manila (up to 109 mm/year in Bulacan Province) is proceeding at 10 to 30 times the rate of sea-level rise. CCS remains at the study stage, with no legal framework yet in place.

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