LIPA CITY, Batangas — The Philippines is setting its sights on regaining the world's number two position in geothermal energy production. The government is accelerating renewable energy development through a ₱10.7 billion de-risking facility designed to unlock the country's vast untapped potential.
A Strategic Shift to Renewable Energy
Energy Secretary Sharon Garin announced the ambitious goal during the 7th Philippine International Geothermal Conference on Thursday. The country currently ranks third globally, behind the United States and Indonesia. However, the Philippines possesses approximately 2,100 megawatts of potential geothermal energy waiting to be explored and developed.
The country currently has around 2,057 MW of installed geothermal capacity, accounting for roughly 6.4 percent of electricity generation in 2025. Garin emphasized that the Philippines has a unique advantage—the biggest geothermal facility in Asia, the Unified Leyte Geothermal Power Plant. This existing infrastructure demonstrates the nation's capability to lead in this sector.
A De-Risking Facility to Spur Investment
The Department of Energy and Land Bank of the Philippines signed a memorandum of agreement in December 2025 for the USD170-million Philippine Geothermal Resource De-Risking Facility. The facility is financed through a sovereign loan from the Manila-based multilateral lender. It provides crucial capital for geothermal exploration, which is often the riskiest and most expensive phase.
Under the mechanism, geothermal developers receive cost-shared exploration support covering up to 50 percent of drilling costs through convertible loans. If drilling efforts prove successful, the funding is treated as a loan. If exploration fails, the funding is converted into a grant, absorbing the financial loss for the developer.
This innovative approach aims to attract private investment that was previously deterred by high upfront costs. The government estimates the current funding can boost domestic geothermal capacity by around 300 MW. At least 12 geothermal service contracts are lined up to secure a share of the financing.
Benefits for Consumers and the Economy
Geothermal power provides continuous, predictable "baseload" electricity regardless of weather conditions. This reliability helps stabilize the grid and reduce the risk of brownouts, unlike intermittent solar or wind. Increasing domestic geothermal supply also shields consumers from volatile global fossil fuel prices.
The push toward a 10 percent geothermal mix will cut carbon emissions and air pollution. This aligns with national climate targets and promotes long-term environmental sustainability. Developing these resources strengthens energy independence and keeps capital within the Philippine economy.
Creating Jobs and Unlocking Potential
High-value jobs in construction, engineering, and plant operations will be created in provincial areas. The de-risking facility is expected to help priority projects reach commercial operation at least three years earlier. Drilling implementation is anticipated to begin by 2028, with a call for proposals set for next month.
Energy Development Corp., the country's largest geothermal player, is seeking support for the Amacan geothermal plant in Mindanao. The company currently operates more than half of the country's installed geothermal capacity. The government's initiative promises to accelerate the development of clean, reliable energy for generations to come.
