A new study warns that the Philippines’ growing reliance on imported liquefied natural gas (LNG) could significantly raise electricity costs over the next four years—but also highlights that a pivot to renewables offers a cheaper, more stable alternative.

According to a joint briefing from Zero Carbon Analytics (ZCA) and the Center for Renewable Energy and Sustainable Technology (CREST), LNG imports are projected to surge by 508% from 2025 to 2029. This could push gas-fired electricity generation costs up by 11% to 24%, contributing to even higher electricity bills for consumers.

“The Philippines has had the third-highest electricity prices in Asia over the past two years. Our analysis shows that importing more gas will likely raise those prices,” said Yu Sun Chin, Asia Regional Researcher at ZCA. “Instead of importing LNG and building costly LNG infrastructure, the government should look instead to the country’s huge potential for solar and wind, which can now produce electricity more cheaply than gas.”

The study estimates that LNG imports and terminal construction will cost a combined USD 5.4 billion (PHP 301.5 billion) from 2025 to 2029. By contrast, solar and onshore wind have become more cost-competitive, with renewables already undercutting gas in the Philippines since 2023.

Rei Panaligan, President of CREST, emphasized the economic opportunity of renewables. “Renewables such as solar and wind are cheaper options than gas both in terms of the upfront costs and generation. Renewables are also a cleaner choice compared to LNG, a fossil fuel that emits significant amounts of greenhouse gases such as methane. The Philippine government should invest further for more renewables and to start closing permanently the door to fossil fuels,” he said.

ZCA and CREST point to existing gains: renewable power has previously cut wholesale prices by 30%, while consumers enrolled in the Green Energy Option Program saved PHP 71.7 million (USD 1.24 million) since 2021 by sourcing their electricity from renewable plants.

Sam Reynolds of the Institute for Energy Economics and Financial Analysis (IEEFA) noted the long-term risk of locking into volatile LNG markets. “A three-fold increase in the country’s LNG import bill over the next four years is fundamentally incompatible with efforts to reduce household electricity prices and bolster economic growth. Supporting the rapid deployment of low-cost, domestically sourced renewables will be critical,” he said.

Should the Philippines double down on renewables to protect consumers from rising energy costs? Share your thoughts and join the discussion on shaping a more resilient and affordable power system.

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