Institute for Climate and Sustainable Cities
PRESS RELEASE

QUEZON CITY, 28 May 2026 — The Institute for Climate and Sustainable Cities (ICSC) stressed the need to strengthen the Philippines’ long-term energy security and affordability amid evolving coal policy developments in Indonesia and increasing volatility of fossil fuels in the global market. 

Indonesia remains the Philippines’ primary source of imported coal, which is largely used for power generation. Recent policy direction by Indonesian President Prabowo Subianto, including plans to strengthen government oversight over the pricing and export of key natural resources, reflects Indonesia’s broader efforts to prioritize domestic economic and energy interests.

The Philippines remains highly dependent on imported coal, with over 80% of supply sourced from abroad in 2024, largely for power generation. This reliance exposes the country to global price volatility, geopolitical risks, and foreign exchange fluctuations beyond domestic control.

This is not the first time that Indonesia has moved to regulate its coal exports in response to domestic priorities. In January 2022, Indonesia declared a one-month coal export ban to prioritize its domestic demand. While the export ban was short-lived and only lasted for a few weeks, the impact on the price was apparent, as it had increased by 37% until the ban was eased. This was succeeded by the 2022–2023 global energy crisis, wherein global coal prices have further skyrocketed to four to five times their prices.  

Recent geopolitical tensions, including disruptions linked to conflicts in the US-Israel war on Iran, have once again driven volatility in global coal markets, with its prices increasing by 15% since the conflict began—further underscoring the Philippines’ vulnerability to external shocks. 

Because power supply contracts from coal plants typically allow automatic pass-through of fuel costs, any increase in global coal prices directly translates into higher electricity rates for domestic consumers. This has been observed across Philippine distribution utilities during periods of global energy market disruptions, including supply constraints, export restrictions, and geopolitical conflicts.

“Coal is not truly affordable when these risks are considered,” Angelo Kairos dela Cruz, Executive Director of ICSC, said. “Instead of stabilizing costs, it exposes Filipino consumers to recurring price spikes and systemic uncertainty beyond our control.” 

ICSC maintains that the Philippine energy policy must urgently prioritize developing indigenous energy resources to reduce systemic risk and strengthen long-term affordability and resilience. With coal dominating the generation mix, the country remains overly exposed to an imported fuel source, as recent price volatility has shown. 

“The long-term priority should be reducing structural dependence on imported fossil fuels while maintaining reliability. This means accelerating indigenous renewable energy, grid modernization, energy storage, transmission expansion, and energy efficiency,” said Dela Cruz. 

“Strengthening our own energy resources is essential to achieving real energy security and protecting consumers from volatile global markets,” he added.

Diversifying toward indigenous resources such as geothermal, hydro, solar, and wind reduces exposure to global market shocks while enhancing energy security and insulating consumers from fuel price swings. Given the country’s archipelagic geography and exposure to extreme weather, power generation must also be more distributed to improve resilience, ensure local reliability, and reduce the impact of outages. ICSC emphasized that the Philippines does not face a shortage of baseload power generating capacity, but rather structural weaknesses stemming from reliance on imported and inflexible baseload generation.

A diversified, distributed, flexible, and resilient energy system provides the only stable foundation for affordable, reliable, and secure electricity for all Filipinos, freeing the country from the impacts of external shocks and geopolitical events.

ABOUT
The Institute for Climate and Sustainable Cities is a Philippine-based non-governmental organization that advances climate, energy, and low-carbon solutions to enable fair and climate-resilient development at the national and international levels.

CONTACT
Sanafe Marcelo, ICSC: media@icsc.ngo, +63968 886 3466, +63917 149 5649

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