Philippines Geothermal Energy Market Size, Share and Outlook - Growth Analysis Report and Forecast Trends (2026-2035)

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Philippines Geothermal Energy Market Growth

Nearly 25% of the world’s total geothermal energy is produced in Southeast Asia. The Philippines, which is situated along the Ring of Fire in the Pacific Ocean, is home to 7 geothermal fields, which produce 12% of its overall electricity. The Philippines Department of Energy plans to increase its medium (2021-25) and long term (2026-2030) geothermal energy production capacity to 288 MW and 900 MW, respectively. The government of the Philippines aims to achieve an additional installed capacity of 1,371 MW by 2030, which is expected to make it a key competitor of the United States, which has an installed capacity of 3,676 MW.

The Philippines is the third largest producer of geothermal energy, followed by Indonesia and the United States. Three geothermal power projects with an additional capacity of 48 MW are expected to start functioning in 2024 while projects worth an aggregate capacity of 381 MW are currently undergoing feasibility studies in the Philippines. In 2022, geothermal energy accounted for 9.3% of overall electricity production. It is expected to remain the leading source of non-hydropower renewable energy, constituting 64% of the overall clean energy production in the country. As per the Philippines Department of Energy, the country has nearly 145 geothermal hostpot areas, which can play a significant role in the shift towards energy sustainability in the country.

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Philippines Geothermal Energy Industry Segmentation

Philippines Geothermal Energy Market Share

Based on type, the market is segmented into ground source heat pump, direct use geothermal, and deep use geothermal system. Over the forecast period, direct use geothermal is projected to grow at a CAGR of 2.6% between 2026 and 2035 due to the high demand for heating in residential and industrial spaces.

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Leading Companies in the Philippines Geothermal Energy Market

In July 2024, the Energy Development Corporation inaugurated a new power plant for geothermal energy production in Manito, Albay. This plant utilises the brine produced by the company’s BacMan facility to produce geothermal energy with the help of binary technology.

• Philippine Geothermal Production Company, Inc.

• Energy Development Corporation

• Aboitiz Power Corporation

• APC Group, Inc.

• Pure Energy Holdings Corporation

• First Gen Corporation

• Others

Market Challenges, Restraints, and Opportunities

The Philippines geothermal sector faces persistent operational headwinds despite its mature pedigree. The Department of Energy notes that exploration alone consumes nearly half of total project costs, with dry-hole risk weighing heavily on investment decisions. Compliance with the Indigenous Peoples Rights Act under Republic Act 8371 requires Free Prior Informed Consent across ancestral domains spanning Mount Apo, Negros, and Leyte, while seismic and volcanic exposure near Mayon and other PAGASA-monitored sites lengthens permitting timelines coordinated across DOE, DENR, ERC, and host LGUs.

Several structural restraints temper the pace of expansion. The country's largest plants at Tiwi, MakBan, Tongonan, and Palinpinon were commissioned between 1979 and 1983 and require capital-intensive upgrades, with EDC alone allocating roughly PHP 100 billion for its Leyte complex and PHP 25 billion for Southern Negros under filings with the DENR. Coal continues to anchor the generation mix at over 40 percent according to DOE data, locational marginal pricing volatility in the Wholesale Electricity Spot Market complicates revenue forecasting, and the country slipped behind Indonesia to third globally in installed capacity.

Opportunities are widening through the USD 170 million Philippine Geothermal Resource De-Risking Facility, 100 percent foreign ownership under amended Republic Act 9513 rules, the inclusion of geothermal in GEA-9, EDC's Indonesia partnership, and binary upgrades at Mahanagdong, Bago, and Tiwi.