‘Ban or Not, Coal Power Projects Remain Hard to Scale’

Why It Matters

The analysis highlights a clash between immediate energy‑price pressures and long‑term decarbonization goals, signaling heightened risk for coal investments and a pivot toward renewables in the Philippines’ power sector.

Key Takeaways

• Coal provides over 60% of Philippines electricity
• Banks stopped financing new coal projects in 2024
• ACEN sees renewable portfolio as safer growth path
• Government debate driven by Middle East conflict fuel prices

Pulse Analysis

The Philippines sits at a crossroads in its energy transition. A moratorium on new coal plants, in place since 2020, reflects the government’s commitment to cut fossil‑fuel reliance, yet recent spikes in global oil prices and the Middle East conflict have reignited calls to lift the ban. Energy Secretary Sharon Garin emphasizes coal’s low‑cost advantage, but the country’s power mix remains heavily weighted toward coal, supplying more than 60 percent of electricity, while renewables lag at roughly a quarter of capacity.

Financing constraints are reshaping the landscape. Major banks—including BDO Unibank, Bank of the Philippine Islands, Security Bank and the Development Bank of the Philippines—have collectively ceased funding new coal projects, a shift confirmed by the Center for Energy, Ecology and Development. This financing vacuum makes large‑scale coal development financially untenable, even if regulatory barriers fall. ACEN Corp., a leading renewable‑energy operator, is leveraging this environment to double down on clean‑energy assets, positioning diversification and energy security as core to its strategy rather than betting on coal.

For investors and policymakers, the situation underscores a broader regional trend: short‑term energy security concerns are increasingly outweighed by financing realities and ESG pressures. The Philippines’ experience signals that even governments willing to reconsider coal bans may struggle to attract capital for new plants, accelerating the shift toward solar, wind, and hybrid solutions. Stakeholders should monitor policy signals, bank lending criteria, and renewable‑project pipelines to gauge where the next wave of power‑sector investment will flow.