Increasing the share of renewable energy in the Philippine power generation mix has the potential to lower energy costs over time and remove a significant barrier to the country’s manufacturing sector, according to an International Monetary Fund (IMF) study.
The paper, titled “Renewable Energy Transition in the Philippines: Trends, Opportunities, Challenges,” notes that the Philippines has some of the highest electricity prices in the ASEAN region. However, recent data from the Independent Electricity Market Operator of the Philippines show average annual prices already declined to P4.14 per kWh in the first half of 2025 from P5.58 per kWh in 2024.
Researchers project that successful rounds of the Green Energy Auction Program could further reduce average prices by about 32 percent to about P3.36 per kilowatt-hour (kWh) in Luzon by 2029. Similar reductions are expected across the Visayas and Mindanao grids as the country pursues its goal of raising the renewable energy share to 50 percent by 2050.
To reach these targets, the Philippines should overcome a massive investment gap and significant structural hurdles. The IMF estimates that the energy transformation will require P10.67 trillion in investment between 2029 and 2050, representing roughly 40 percent of the nation’s 2024 gross domestic product.
While the country possesses an estimated 1,200 gigawatts of potential power from solar and wind, its current installed renewable capacity stands at only 9.5 gigawatts.
The government remains optimistic about achieving 30.5 gigawatts by 2030, but the transition is hampered by weak grid infrastructure, high capital costs and complex land acquisition processes, according to the study.
Recent reforms have sought to address these bottlenecks, including the Accelerated and Reformed Right-of-Way Act and a memorandum between the Department of Energy and the Department of Environment and Natural Resources to speed up offshore wind projects. Despite these efforts, a shortage of specialized talent persists.
An International Labor Organization 2025 survey also found a substantial gap in the skilled renewable energy workforce.
Department of Labor and Employment Institute for Labor Studies researchers reported that 75 percent of company representatives struggle to hire qualified candidates for technical positions. The shortage is particularly acute for higher-skilled roles and managers who possess both technical expertise and project management skills.
The Philippines remains heavily reliant on imported fossil fuels, which accounted for 50.6 percent of the total primary energy supply in 2022. Without a sustained transition, this dependence could rise to 61.1 percent by 2050, leaving the economy vulnerable to global commodity price volatility and threatening long-term macroeconomic stability.
