LNG: Powering the Philippines’ low-carbon leap

Visiting the Philippines in May, we thought it was evident that the country is at an exciting phase in its development and a pivotal time for its energy system. 

Sustaining economic growth of more than 5% per year will require meeting electricity demand that is projected to grow at 4.6% annually. Achieving this while also reducing emissions is a complex challenge the Philippines shares with other fast-growing economies in Asia.

The extent to which the Philippines continues to lean on coal or shifts towards liquefied natural gas (LNG) will be critical.

The Philippine Energy Plan 2023-2050 (PEP) projects a future where rapid expansion of renewable energy will be complemented by increased gas-fired power, reducing reliance on coal.

With the decline of the Malampaya field, which has supplied 20% of the country’s power generation, LNG imports would become more prominent. 

Meeting with energy stakeholders during our visit, it was clear that there is significant momentum towards and support for this transition to gas. 

We were honored to spend time with Department of Energy Officer-in-Charge Sharon Garin, leaders from the Makati Business Club, senior executives from Prime Energy, Meralco PowerGen and Alsons Power Group, as well as the team from the Gas Policy Development Project.

There was widespread agreement that LNG offers the flexibility needed to support renewable energy expansion while maintaining grid stability

Finding the best combination of inputs from a range of energy sources will be vital for the Philippines’ development. This mix must be affordable and practical, providing energy security, and promoting economic growth.

However, renewable energy implementation faces delays. With procurement still behind schedule after several rounds of Green Energy Auctions, there is a strong likelihood that the Philippines’ 2030 target of a 35-percent renewable energy share will not be achieved.

Without other solutions, planned retirement of coal-fired power stations would be slowed, and emissions reduction goals would not be met.

But there is an alternative. The Asia Natural Gas and Energy Association (ANGEA) believes LNG is a proven solution that can play a bigger role than forecast in the PEP and help keep decarbonization on track.

The reliability of gas-fired power would counter uncertainty around other energy sources, while also significantly reducing emissions compared to coal.

ANGEA recently commissioned leading data and analytics agency S&P Global Commodity Insights to undertake a detailed analysis of decarbonization pathways for the power sector in the Philippines.

The study demonstrates how the Philippines can meaningfully and rapidly reduce emissions without compromising energy security.

S&P Global’s analysis showed that LNG from Australia, the US, and Qatar being used in the Philippines, Japan, and Vietnam had 47% lower lifecycle carbon intensity and 57% lower end-use emissions compared to coal. This reflects the immediate emission reduction benefit that can be achieved by replacing coal with gas in power generation.

The study also highlighted how increased use of LNG – beyond the targets of the PEP – could enable affordable decarbonization in the Philippines.

A balanced approach, with more LNG supporting expansion of renewables, could support the retirement of half of coal-fired power by 2035. This would reduce power sector emissions by 38% with an additional energy system investment of just 16%.

By contrast, an accelerated approach aimed at total decarbonization of the power sector by 2035 would be prohibitively expensive.

S&P Global found this scenario would require energy system investment in the Philippines to double, with communities and industries projected to pay twice as much for electricity.

While the Philippines’ LNG industry has made impressive progress since imports started in April 2023, taking full advantage of the opportunities offered by coal-to-gas switching will require considerable further development.

This includes ongoing investment in new import and power infrastructure, continued development and refinement of policy and regulation, and growth in workforce capability and capacity.

This could involve retraining and upskilling workers in coal-dependent communities. There also needs to be sufficient global supply of LNG in the coming decades to ensure it is affordable and available to the Philippines.

ANGEA stands ready to assist government and industry as they strive to grow the Philippines’ LNG capabilities and navigate the energy transition.

Our organization was established in 2021 to provide exactly this type of collaboration and support, including raising awareness in major LNG supply nations of the energy needs of countries such as the Philippines.

ANGEA's member companies, meanwhile, have decades of global experience managing and supporting the establishment of LNG supply chains and associated infrastructure. 

The ANGEA team is looking forward to returning to the Philippines in August to continue productive dialogue with key energy stakeholders.

We are confident that LNG can be a major part of the energy mix that powers the Philippines’ bright future.

Establishing clear regulatory frameworks and timeline certainty will help policymakers attract the necessary investment to enable a successful transition.

In sum, LNG offers the Philippines a strategic bridge to a more sustainable energy future—balancing economic ambition with environmental responsibility.

For enterprise, it ensures a stable, lower-emission energy supply essential to powering growth, innovation and competitiveness. For everyday consumers, it means access to more reliable electricity with less risk of runaway costs.

And at the national level, LNG strengthens energy security and reduces dependence on volatile coal markets, while supporting the scale-up of renewables.

With the right infrastructure, policy clarity, and investment, LNG can anchor a pragmatic, affordable path to decarbonization—one that accelerates progress without sacrificing momentum.

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Neil Theobald is senior advisor and Laila Nowell is chief of staff at the Asia Natural Gas & Energy Association (ANGEA). ANGEA works with governments, industries and communities in Asia, providing affordable solutions that promote energy security, economic growth and decarbonization.