SAN SALVADOR ISLAND—With a piece of chalk, Christopher de Vera Sr. marked the sketch of a triangle-shaped Panatag (Scarborough) Shoal on the board, labeling the entrance in the east and pointing out where Chinese vessels are often seen on patrol.

Laughter filled the venue of the meeting, a classroom of San Salvador High School in this island-village of Masinloc, Zambales, as he recounted being chased away by Chinese vessels when he attempted to enter the area.

De Vera is a member of the Bigkis Fisherfolk Federation, which met with the head of the Peoples Development Institute (PDI), a nongovernment organization, on July 9 to discuss the House of Representatives’ inquiry into China’s human rights violations against Filipino fishers in the West Philippine Sea (WPS).

In a letter sent to the House committee on human rights, PDI said Filipino fishers asserting their rights to Panatag’s resources are forced to endure severe harassment and intimidation by China, causing psychological trauma.

SAN SALVADOR ISLAND—With a piece of chalk, Christopher de Vera Sr. marked the sketch of a triangle-shaped Panatag (Scarborough) Shoal on the board, labeling the entrance in the east and pointing out where Chinese vessels are often seen on patrol.

Laughter filled the venue of the meeting, a classroom of San Salvador High School in this island-village of Masinloc, Zambales, as he recounted being chased away by Chinese vessels when he attempted to enter the area.

De Vera is a member of the Bigkis Fisherfolk Federation, which met with the head of the Peoples Development Institute (PDI), a nongovernment organization, on July 9 to discuss the House of Representatives’ inquiry into China’s human rights violations against Filipino fishers in the West Philippine Sea (WPS).

In a letter sent to the House committee on human rights, PDI said Filipino fishers asserting their rights to Panatag’s resources are forced to endure severe harassment and intimidation by China, causing psychological trauma.

Ria Miclat-Teves, head of the Peoples Development Institute, discusses legislative action to help fishers suffering from the sea conflict.

China’s incursions into the WPS have environmental, economic, and social impact [negatively affecting] the Filipino fisherfolk whose right to food and right to personal security are being violated as they lose their main source of livelihood,” the letter read in part.  

500 families

Rony Drio, 57, has been fishing in the West Philippine Sea since he was a teenager, and fishing is his means of supporting his eight children. Over 500 families on the island rely primarily on fishing to survive. 

Map of the Masinloc-Oyon Bay Protected Landscape and Seascape —SCREENSHOT FROM ALLEN CORAL ATLAS

San Salvador is part of the 7,558-hectare Masinloc-Oyon Bay Protected Landscape and Seascape (MOPLS) under the Expanded National Integrated Protected Areas System (E-Nipas) Act of 2018. The law defines protected areas as specific portions of land and/or water reserved for their unique physical and biological diversity, and safeguarded against destructive human activities.

The MOBPLS is divided into multiple-use zones (where fishing is allowed) and strict protection zones.

Drio is engaged in spearfishing, while others use nets and hooks in compliance with the E-Nipas Act and the Philippine Fisheries Code of 1998. 

When typhoons and heavy rains prevent him from going out to sea, Drio tills a rice farm on the island in a sharing arrangement: Of the 10 sacks of palay harvested, the landowner gets three. “I only get a small income from it,” he said in Filipino.

How it was before

From February to June in the past, San Salvador fishers typically sailed to the municipal waters of Masinloc and headed to Panatag (or Bajo de Masinloc) to increase their catch. The shoal is approximately 120 nautical miles west of Masinloc, and its lagoon is known for abundant marine resources.

According to Bigkis president Randy Megu, 51, bright corals, visible during low tide, used to greet them when they entered the shoal. Further inside are white sandbars where they anchored their damaged boats for repair, he said.

The fishers recalled leaving home at midnight to be able to reach the shoal by morning, with daylight allowing them to easily locate its entrance. “We used to fish all day in Bajo de Masinloc,” Drio said.

But more than food, the shoal offered shelter to fishers during storms because of the serene waters in the lagoon. (In Filipino, Panatag means “calm.”)

All that changed in 2012 when, after a standoff between Philippine and Chinese vessels, China seized control of Panatag. It deployed its coast guard and maritime militia, which bullied and chased Filipino fishers away from the area.

Megu recalled the Chinese forces seizing their catch and sometimes their belongings in exchange for a pack of cigarettes and two bottles of liquor. 

The Filipinos are now unable to enter Panatag even during stormy weather.

Giant clams

And the Chinese forces’ increased harvesting of giant clams has gradually destroyed the marine environment. “The corals appeared to have become sand … and the fish decreased because of habitat loss,” Megu said.

In a 2023 report, the Washington-based Center for Strategic and International Studies (CSIS) said 1,889 acres of reef in Scarborough Shoal have been damaged by Chinese fishers’ harvesting of giant clams.

The overall estimate of the CSIS, through its Asia Maritime Transparency Initiative, is that China’s giant clam harvesting has damaged over 16,500 acres of reef in the South China Sea.

According to the CSIS report titled “Deep Blue Scars: Environmental Threats to the South China Sea,” Chinese fishers use either brass propellers dragged into reef surfaces or high-pressure water pumps to suck out giant clams, destroying the seabed.

The report analyzed commercial satellite imagery of 181 features of the South China Sea. It showed that China is the top reef destroyer in the South China Sea through dredging and land fill, burying roughly 4,648 acres of reefs to build artificial islands.

“Panatag used to shine because of the corals surrounding it. It still shines today, but because of the lights of Chinese ships in the area,” Megu said.

Slashed income

Gateway to San Salvador Island in Masinloc, Zambales —PHOTO BY ISA JANE ACABAL

According to the San Salvador fishers, their income has been cut nearly by half since China seized Panatag. They are now operating at a loss due to low catch and high expenses including diesel (of which they need between 100 and 1,000 liters per trip, depending on the boat size, at a cost of at least P60 per liter), and food (rice, groceries), as well as fishing bait.

The total expenses and the 10% commission for the boat owner are deducted from the revenue generated from the fish sales, Megu said, adding that the remaining amount is divided among the fishers aboard the boat.

In 2016, an arbitral tribunal in The Hague ruled in favor of the Philippines, invalidating China’s sweeping claim over almost the entire South China Sea under the United Nations Convention on the Law of the Sea.

The tribunal clarified that Panatag (Scarborough) Shoal constitutes fishing ground for nations including the Philippines, and ruled that China had violated the Philippines’ sovereign rights by blocking Filipino fishers from these waters.

China continues to reject the arbitral ruling. In May 2024, China issued the “Provisions on Administrative Law Enforcement Procedures of Coast Guard Agencies” or the “China Coast Guard Order No. 3 of 2024,” a set of regulations outlining how its coast guard will carry out administrative law enforcement operations. 

The new regulation authorizes China’s coast guard to detain for up to 60 days foreigners suspected of violating exit and entry rules in waters it claims.

The Philippines’ Department of Foreign Affairs (DFA) has said that enforcing these regulations in the West Philippine Sea would be “in direct violation of international law.”

“Every sovereign state has the right to formulate and enact laws … however, a state’s domestic laws may not be applied and enforced in the territory, maritime zones or jurisdiction of other states,” the DFA statement read.

Fear

Still, Filipinos are avoiding fishing near Panatag for fear of what Chinese forces will do. “We have fear. We are afraid to fish there,” Drio said.

Bigkis urged the government to protect Filipinos and continue fighting for the Filipinos’ right to fish in the West Philippine Sea.  

Drio said the group had been calling on the authorities “to watch over us for our safety and peace of mind when we are fishing” in Panatag. But he acknowledged that it was a challenge considering China’s continuing aggression.

While Filipino fishers want the Philippine Coast Guard to be present and to extend help when they need it to ease their fear, “there’s nothing we can do,” Drio said. “From what I see now, it’s difficult because even our uniformed personnel at sea are being blocked.” 

Like Drio, Megu believes that the government should step up its efforts to resolve the conflict between the Philippines and China.

“They should find a way to solve this problem and restore the vigor and freedom of Filipino fishermen in Bajo de Masinloc,” Megu said.

Isa Jane Acabal, a journalism student of the University of the Philippines’ College of Mass Communication in Diliman, is an intern at CoverStory.ph.

Read more: Gov’t urged: Defend, assert territorial integrity in West Philippine Sea

First published in CoverStory – July 30, 2024

Had the rain still poured last Sept. 3 when volunteer inspectors arrived at a rugged hilly portion of Panay’s northwestern mountain range, a government-declared protected area, the road being carved out would have become messy swathes of uprooted grasses and shrubs, fallen trees, mud pools and protruding rocks.  

The earth-moving activities pushed on despite the bad weather to clear the way for the heavy equipment needed to put up six more wind turbines of PetroWind Energy Inc. (PWEI) inside the designated “multiple use zone” of the Northwest Panay Peninsula Natural Park (NPNPP) in Barangay Pawa in Nabas, Aklan.

Environmentalists and local officials in nearby Malay town have called for a halt to PWEI’s expansion project, citing threats to biodiversity, including damage to wildlife habitat and disruption of migratory birds’ flight routes, as well as siltation of several rivers and streams that is feared to contaminate the supply of water to lowland communities and the world-renowned Boracay Island.

Evidence of siltation in Argao shore in Malay taken last 03 August 2023. —PHOTOS BY RICHARD CAHILIG

“We frequently champion green energy as a cornerstone for future sustainability and development. However, if the methods employed to generate this green energy exact a substantially higher toll on our precious environment, the very foundation of our well-being, should we still deem it a worthwhile endeavor?” the Philippine Initiative for Conservation of the Environment and the People (PhilinCon) and the Aklan Trekkers Inc. said in a position paper.

On Friday, PWEI officials reported that work on the project site of three additional turbines in Malay, including road construction, had been suspended in response to the complaints of the local government. But work on the Nabas site, where three other turbines will be erected, continues, they said.

“Stopping is not the solution,” Vanessa Peralta, PWEI assistant vice president for corporate communication, told CoverStory.ph editors in an interview. “We are willing to work with the local government unit (Malay) and even critics” as partners in protecting the NPPNP, she said, extending an invitation to dialogue with them.

Malay is wary about the environmental consequences of the road project. It shares the natural park, one of the country’s remaining lowland rainforests and home to endemic and endangered fauna and flora in Panay and Negros, with Nabas and the towns of Libertad, Pandan and Buruanga in Antique. 

Wildlife habitat

The NPPNP was established in 2002 through a presidential proclamation. It spans 12,009 hectares of mountain forests and watersheds that provide potable water to communities, including Boracay. It also shelters the critically endangered Visayan warty pigs (Sus cebifrons) and writhed-billed hornbills (Rhabdotorrhinus waldeni), and the endangered Visayan hornbills (Penelopides panini) and agarwood (Aquilaria malaccensis).

PWEI has already put up 18 wind turbines, some visible from Boracay in Malay, at 300-500 meters above sea level on northern Aklan’s topmost ridge—“currently the Philippines’ highest perched wind farm” and the province’s “biggest source of local power,” according to the company’s website. 

Map of the wind turbines. —PWEI ILLUSTRATION

Incorporated on March 6, 2013, PWEI is a joint venture of PetroGreen Energy Corp. and Thailand’s BCPG Public Co. Ltd. It is “primarily focused on expanding the country’s renewable energy capacity by tapping wind power.”

Under Phase 2 of the wind farm project, six more turbines will be set up with a combined power generating capacity of 14MW through a P1.8-billion loan from the Development Bank of the Philippines in the northern boundary of the NPPNP in Barangay Pawa in Nabas and Barangay Napaan in Malay.

“We are proud of the inroads we have made in advancing the wind energy sector,” PWEI said, declaring its mission to “uplift the communities where we operate through socially and environmentally responsible operation.”

PWEI said the project “helps address the rising energy requirements of the island of Boracay.” It has laid out a network of transmission lines, access roads and a control station in Barangays Pawa, Rizal and Unidos in Nabas, and Napaan in Malay. 

Adverse impact 

But Malay officials say their town will be adversely affected by the expansion project, and point out that PWEI has yet to address the environmental damage brought about by its existing turbines under Phase 1.

Road construction project

A joint environmental “audit hike” of the road construction on Pawa Ridge was conducted last Sept. 3 by Malay, PhilinCon, Aklan Trekkers, and a conservation volunteer group. The project, they found, “had created conditions conducive to substantial siltation.” 

“The landscape bore witness to the massive cutting of trees, improper earth balling, and the conspicuous bulldozing of areas, signaling the potential disruption of the natural water flow and the broader ecosystem,” Aklan Trekkers (or Traditional and Ridge-to-Reef Ecological Key Knowledge for Environmental Resiliency and Sustainability) reported.

According to a PWEI PowerPoint presentation, the company’s earth- and tree-balling operations were “mandated” by the Provincial Environment and Natural Resources Office.  

A rapid biodiversity survey conducted by a team led by Flavio A. Nava, a veterinary medicine student at Aklan State University, showed that the project poses threats to bird life, plant species, wildlife, and “beyond animal” harm. (The team published its findings on Sept. 26 and uploaded its report at  https://bitly.ws/Wcbp.)

At least 40 wildlife species have been identified in the road project area, including 13 endemic to the Philippines and two found only in Negros and Panay. Some plant species are known to have an ecological relationship with certain animals, such as the tree species Neonauclea sp., a nectar source for the Purple-throated Sunbirds. (The Magnificent Sunbird—Aethopyga magnifica—was the only confirmed Sunbird species on the site.)

Road network

Citing an official site re-inspection on July 13, the team said the road work, including tree cutting and bulldozing, went on even when it rained, leading to “significant” downstream siltation. 

The presence of Aklan Trekkers and other agencies during the drone documentation, re-inspection and inventory of installed retaining gabion walls was prompted by a request made a day earlier by Malay’s Sangguniang Bayan (municipal council).

So far, a kilometers-long road network, six to eight meters wide, has been made uphill from Turbine 11 inside the NPPNP’s “multiple use zone,” less than a kilometer away from its “strict protected zone.”

The group said it reviewed PWEI documents and identified inconsistencies, problems and issues in different phases of the company’s road network and platform operations, including loss of livelihood, tourism, budget allocations, accessibility, and the guarantee of sustainability. 

It charged PWEI with failure to implement effective engineering measures to check soil erosion and the severe consequences of heavy siltation, resulting in the destruction of terrestrial and aquatic systems in the protected area.

The biodiversity survey team noted that despite the environmental impacts, PWEI’s compliance paper did not include thorough assessments to examine the effects of disturbances on the local flora and fauna in Napaan, nor did it conduct an inventory of wildlife in the area. 

On July 21, the Malay council’s committees on land use and public safety held a public hearing to discuss the findings. It decided to carry out another joint inspection, this time on the upstream tributaries of the Nabaoy River Watershed.

Sedimentation

The July 30 inspection at Daeamuan River uncovered sedimentation and clouding of a creek upstream even in fine weather, apparently due to loosened soil and rainwater runoff from the construction activities at Pawa Ridge to the Nabaoy River Watershed, according to the committee report. 

Images of siltation and sedimentation along Daeamuan River in Malay last 30 of July 2023. —PHOTOS FROM AKLAN TREKKERS

From the Pawa Ridge, the sediments have reached Daeamuan River, one of the upstream tributaries of Nabaoy River, the main source of water for Malay and Boracay. Utilities, including the Malay Water District, Boracay Island Water Co., and Boracay Tubi, have expressed concern about a possible decline in water quality. 

Local residents and ecotourism businesses also fear that the looming river contamination will jeopardize their source of livelihood.  

“Maueoy man kamo sa Nabaoy (Have pity on Nabaoy),” Bing Quinto, the barangay chair of Nabaoy, told PhilinCon in Aklanon. Though the community’s river has been identified as the “direct impact site” of the PWEI expansion project, it has not been mentioned in the company’s EIA (Environmental Impact Assessment) or any other document.

Images of the destroyed gabions in Napaan River Watersged from an ocular inspection conducted last 07 June 2023. —PHOTOS FROM ENGINEERING AND ZONING OFFICES, LGU MALAY

According to PWEI, the matter of sediments entering Napaan River has been “considerably addressed” and that monitoring and rehabilitation of gabions are done regularly “by a multistakeholder group.” It said “road construction spoils” were being hauled by trucks to a disposal site 6-7 km away along the main highway.

It issued the assurance that the company “is committed to conduct rehabilitation if there are traces of sediments coming from the project site still.”

Peralta described the damage brought by the road project as “minimal” and “manageable.” She said PWEI maintains an environmental guarantee fund amounting to P3 million yearly for Malay and Nabas, on top of its corporate social responsibility and ridge-to-reef rehabilitation funds.

Endorsement revoked

Last Aug. 3, Malay’s municipal council approved a resolution revoking its earlier endorsement of the Phase 2 project in its territory, a day after the Barangay Council of Nabaoy passed a similar resolution that cited risks to its sources of potable water.

In two other resolutions, the town officials urged PWEI to halt its project and road construction, and the Department of Environment and Natural Resources (DENR) to cancel a permit it granted the company. The DENR regional office allowed the project within the natural park through a Special Use Agreement in Protected Areas (Sapa) it issued last Feb. 17 and under the guidelines of the Enipas (Expanded National Integrated Protected Areas System) Act of 2018.

PWEI insisted that it had complied with all the requirements of Sapa and the environmental compliance certificate (ECC), and had consulted with barangay officials three times since 2022. 

The wind farm was commissioned in June 2015 after the company acquired an ECC from the DENR in 2012. Several amendments were made in the document until 2021. 

The findings of the environmental audit team on the actual state of Napaan and Nabaoy Rivers were presented on Sept. 7 in a committee hearing and subsequently raised to the provincial board on Oct. 3 in a joint public hearing of the committees on energy; laws, rules and ordinances; environment; and tourism, arts and culture.

Green coalition

Several groups have formed the Protect Northwest Panay Peninsula Natural Park Coalition to demand a stop to PWEI’s wind farm expansion. The groups are PhilinCon, Aklan Trekkers, Wildlife Conservation Protection Society, Living Laudato Si Philippines, Diocese of Antique Social Action Center, Boracay Foundation Inc., Pandan, Antique Union for Conservation, Rotary Club of Metro Kalibo, Aklan Press Club, and Antique Trail Runners.

The coalition has released a position paper and launched an online petition opposing the project. (https://www.facebook.com/ProtectNPPNP)

“We are not against renewables; they are supposed to be solutions to the climate crisis,” PhilinCon chair Rebecca Tandug Barrios told CoverStory.ph. “However, the unjust transition can cause more ecological damage than the promised greenwashed solutions.” 

Barrios described PWEI as a “green solutions company,” but said it “should earn the respect of being sustainable by not compromising the health of the forests they were allowed to co-develop. The principle is co-stewardship.”

She added: “If development projects compromise the watersheds and streams for corporate income, then it defeats the principle we are selling in the guise of green energy transition. In the principles of economic trade-offs, what does the LGU trade for compromising the ridge-to-reef health of NPPNP?”

First published in CoverStory – October 28, 2023

PHOTOS AND IMAGES FROM PCIJ

From brewing beer to burning coal, the food and beer giant, San Miguel Corp. of tycoon Ramon Ang, is now one of the Philippines’ largest power producers.

Its energy arm, San Miguel Global Power, is a younger player in the industry. But, flush with cash, it aggressively built, acquired, and expanded power plants over the last two decades. 

At the end of 2024, San Miguel claimed sector dominance with installed generation capacity of 6,079.6 megawatts (MW), the country’s largest.

With a 22.4% market share of the national grid, San Miguel overtook Aboitiz Equity Ventures, or the Aboitiz Group, the family-owned conglomerate whose main business is power. It is led by Sabin Aboitiz, economic adviser to President Ferdinand Marcos Jr. and convenor of the Private Sector Advisory Council.

The difference was only 185 MW, with Aboitiz holding 5,894.5 MW or 21.75% of the grid. 

The Aboitiz Group is poised to reclaim the top spot by year’s end, based on July 2025 data from the Energy Regulatory Commission (ERC). But regardless of the ranking, the two conglomerates generate close to half of the Philippines’ power supply. 

Their fuel of choice: coal. It is the single largest source of carbon dioxide emissions, which triggers global warming and extreme weather such as stronger typhoons, heavier floods, and prolonged droughts.

Coal-fired plants make up more than 60% of the facilities operated by San Miguel Global Power, according to its 2024 annual report. The Aboitiz Group, meanwhile, reported that coal accounted for 48% of its total net sellable capacity as of May 2025. Together with gas, fossil fuels made up at least 75% of the total capacity of both companies.

San Miguel and Aboitiz keep households lit and the economy running—including industries they themselves dominate—yet their reliance on coal has pushed the fossil fuel share of the Philippines’ power generation from just 7.4% in 1990 to 62.5% in 2024. 

The science on the impact of coal on climate change is settled. In 2015, governments recognized the urgency of the climate emergency and adopted the landmark Paris Agreement at COP21, committing to limit global warming well below 2°C and pursue efforts to cap it at 1.5°C. The Philippines, one of the world’s most climate-vulnerable countries, pushed for the inclusion of the 1.5°C target in the final text.

In line with these commitments, the Philippine Energy Plan set targets to reduce reliance on fossil fuels and raise renewables from the current 22% to 35% by 2030 and to 50% by 2040.

Given their hold on the market, the same conglomerates have the power to accelerate—or obstruct—these targets.

Continued expansion of fossil fuels

Each new power plant that goes online is either a step forward or a step back for the country’s transition to clean energy.

Coal helped San Miguel to surpass Aboitiz in 2024. Three of four units of its coal plant in Mariveles, Bataan, were commissioned between March and December 2024, adding 450 MW.

Aboitiz rolled out new renewable projects this year, but another fossil fuel—liquefied natural gas (LNG)—increased its energy portfolio. In January, it completed the acquisition of a 27% stake in a $3.3-billion “mega deal” with Meralco and San Miguel to build an integrated LNG facility in Batangas.

The transaction, which resulted in San Miguel giving up majority ownership of the assets, covers two LNG facilities—the 1,278-MW Ilijan combined-cycle plant of South Premiere Power Corp. and the new 1,320-MW facility of Excellent Energy Resources Inc. (EERI).

Meralco PowerGen Corp. took the biggest stake in the LNG venture at 40%. The subsidiary of the country’s largest power distributor, Meralco, which sources much of its supply from coal plants, is also its fourth-largest power producer.

Under a separate deal, Meralco will be buying 1,200-MW of LNG-generated output from the EERI facility.

Many of the conglomerates have turned to LNG in their bid to cut coal use. It is a move opposed by climate activists, who urge them to leapfrog directly to renewables, where many options are already available.

The continued LNG expansion is shaking up the Philippines’ power sector.

In May 2025, tycoon Enrique Razon’s Prime Infrastructure Capital announced a ₱50-billion agreement to acquire a 60% stake in the Lopez Group’s Batangas LNG terminal project, though the deal has yet to be formalized. 

The gas fleet tied to the terminal generates nearly 2,500 MW, with another 1,200 MW in the pipeline. With a 60% stake, Razon would control about 1,500 MW of existing capacity—almost equal to the Ayala Group’s installed capacity. He is already active in power distribution.

The Lopez group is the Philippines’ third-largest power producer; the Ayala group ranks fifth.

Aboitiz Power said it was taking a “pragmatic approach to the energy transition,” citing the role of coal and LNG in balancing the country’s energy mix to ensure reliable and affordable power.  

“It is important to consider the material consequences of phasing out coal plants without a viable and affordable baseload alternative,” the company said in a statement sent to the Philippine Center for Investigative Journalism (PCIJ).

“The transition to a greater share of renewable energy in both the Philippine and Aboitiz Power’s energy mix will take time,” it said. 

Meralco PowerGen told PCIJ that  “renewable energy—while rapidly expanding—is not yet sufficient on its own to meet the continuous and growing demand for electricity.” 

“While we recognize that LNG is still a fossil fuel, it has a significantly lower carbon footprint compared to coal and provides the flexibility and reliability our grid urgently needs while renewable energy and storage solutions continue to scale,” Meralco PowerGen said in a separate statement.

LNG is cleaner than coal, but it comes at a higher cost.

‘Coal plants should be retired’

Climate activists contest the idea that coal and LNG are necessary for the Philippines’ energy security. They said these are not only dirty fossil fuels but also the main drivers of high electricity costs in the country, because both are imported.

“Coal power plants should already be retired. They only appear economically viable because the additional costs are passed on to consumers,” said Romil Hernandez, director for energy policy at the Institute for Climate and Sustainable Cities (ICSC), referring to automatic pass-through fuel cost provisions that are charged to consumers through their electricity bills.

Aboitiz Power argued that market prices fluctuate and that consumers stood to benefit during cycles of low prices. “Currently, coal prices are low and thus we all enjoy affordable as well as reliable power due to this,” it said.

Meralco PowerGen told PCIJ it had started shifting to renewable energy, but claimed this process could not be rushed.

“It is true that global fuel price volatility directly affects electricity costs in the Philippines, since much of our coal and LNG supply is imported. This is precisely why [Meralco PowerGen] is accelerating the shift to renewable energy, which offers price stability, energy security, and affordability in the long term for Filipino consumers,” it said, adding: 

“At the same time we must balance this transition with the country’s immediate need for reliable and continuous power supply.”

Conglomerates know the reign of fossil fuels is ending, said climate expert Antonio La Viña, lead negotiator and spokesperson of the Philippine delegation during the 2015 Paris climate negotiation. 

“They want to maximize the operations [of their coal plants] before fully shifting to renewables. That’s the biggest obstacle to transition—the conglomerates that control the energy system refuse to cross over fully,” he said.

Jonelle Mitzi Tan, 27, a youth climate justice activist in the Philippines, urged fellow young people to get involved in pushing for clean energy because they would “live with the consequences the longest.”

“If we truly care about our people and our future, we cannot afford half-measures. We must phase out coal rapidly, cancel LNG expansion, and invest in renewables that are community-owned, accessible, and resilient in the face of typhoons and rising seas,” said Tan, convenor of the Youth Advocates for Climate Action Philippines.  

San Miguel did not respond to PCIJ’s questions. We will update this report when it does.

1980s power crisis

The Philippines now bears the second highest electricity rates in the region, next only to Singapore. Numerous studies trace this to policies crafted in response to the 1980s power crisis, later entrenched by the 2001 Electric Power Industry Reform Act (Epira), which privatized the power sector. Without the subsidies to cushion costs that other governments provide, the country left households and businesses exposed—discouraging manufacturing and foreign investment.

Eight- to twelve-hour blackouts in the 1990s crippled industries, eroded investor confidence, and fueled public uproar. The state-owned National Power Corp. (Napocor), once the operator of all of the country’s major generation assets, was burdened by debt and had limited capacity to build new plants. 

President Corazon Aquino’s 1987 Executive Order No. 215 opened power generation to private firms for the first time since the nationalization of the sector under Napocor. In 1993, Aquino’s successor, Fidel Ramos, was granted emergency powers under the Electric Power Crisis Act, which he used to fast-track contracts with private producers.

Who had the financial muscle and technical expertise to build and operate new power plants of large capacities?

The tycoons lacked both at the time, leaving foreign investors to take the lead, said Alberto Dalusung III, who served in the Ministry of Energy during the  presidency of Ferdinand Marcos Sr. He is an advocate of renewable energy development.

The first build-operate-transfer (BOT) power plants ran on gas turbines—normally meant to run only during peak hours but pressed into continuous baseload operation while coal plants were still being built. They eased blackouts but saddled consumers with higher electricity bills.

Napocor built Masinloc and added a second unit to Calaca, while foreign firms developed Pagbilao and Sual under BOT deals. Completed between the late 1990s and early 2000s, these plants are still among the country’s largest coal-fired baseload facilities, or plants designed to meet minimum demand.

To solve the power crisis, Ramos encouraged investors by offering take-or-pay guarantees that ensured Napocor getting paid for fixed capacities whether or not the electricity was actually consumed. 

Activists protested, citing pollution, damaged fisheries, and health risks, but concerns over blackouts prevailed.

“We turned to coal in panic—or were manipulated into turning to coal,” said La Viña. The power crisis allowed a “strong coal lobby” to “shove the technology” onto the Philippines on the premise that large coal baseload power plants were quick to build and could deliver cheap electricity, he said.

The take-or-pay obligations bloated Napocor’s financial burden. This would become a key driver of Epira, which mandated the privatization of Napocor assets. 

The law, passed three years after Ramos left office, aimed to dismantle the state monopoly, restructure the power sector and broaden ownership of generation and distribution, encourage indigenous and renewable resources, and reduce reliance on imports.

Epira assigned three key institutions to carry out its reforms in the generation sector:

• The Power Sector Assets and Liabilities Management Corp. (PSALM) took over Napocor’s assets and debts, selling these to private players. 
• The Wholesale Electricity Spot Market (WESM) introduced a trading platform for generators
• The Energy Regulatory Commission (ERC) was tasked with rate regulation and consumer protection.

Two decades later, however, Epira has failed, critics argued. “Ang pangako ng Epira ay lower electricity cost. Palpak ‘yun (The promise of Epira was lower electricity costs. That promise failed),” said Gerry Arances of the Center for Energy, Ecology, and Development (CEED).

Epira allowed cross-ownership between power producers and distribution utilities, which blurred competition as companies engaged in both generation and distribution, La Viña said. 

“Meralco is buying power from itself,” he said. “The irony is: You wanted privatization and a free market. Instead, you ended up with oligarchs controlling your energy system.” 

Epira allows a distribution utility to source up to 50% of its demand from an affiliated company, a rule critics say gives those firms an undue advantage over competitors. Meralco PowerGen told PCIJ that all its power supply agreements went through ERC approval.

The Ramos-era take-or-pay arrangements also persisted under new names, like capacity payment. It worked the same way in practice, said Dalusung. Fuel pass-through clauses also let firms shift global fuel price volatility directly to consumers. 

When the rush to build coal plants left Luzon with an oversupply of power by the mid-2000s, consumers had to pay for the unused electricity.

The take-or-pay incentives made sense during a power crisis, said the ICSC’s Hernandez. “But unlike in other countries where incentives have limits, here they seem to last forever,” he said. 

While the incentives shifted risks to consumers, investors virtually had none, Hernandez said. Today, it’s hard to name a tycoon who has not entered the power sector. 

Allegations of regulatory capture also abound, undermining effective oversight. As a recent Australian National University brief put it, Epira reinforced monopolies and oligopolies: “The energy sector remains deeply entrenched in the country’s oligarchic structures, weakening policy enforcement and hindering reform.”

Conglomerates fuel the coal boom

As conglomerates acquired Napocor assets and built new plants, Congress passed the Renewable Energy Act in 2008 to restore the use of indigenous resources, bring back renewable energy’s earlier dominance, strengthen energy self-reliance, and reduce dependence on fossil fuels.

But opposition and implementation delays blunted its impact, and by 2010, coal had overtaken renewables as the dominant source of power. 

During this period, local conglomerates also caught up with foreign firms, taking control of major coal plants and building new ones.

The Aboitiz family, which had long been in power distribution, expanded into generation during the power crisis. Dalusung said the family had built its reputation as a leading hydropower player—building small hydro plants and then acquiring Napocor’s assets—before moving into coal. 

In 2008, it acquired the 700-MW Pagbilao coal plant in Quezon through Therma Luzon Inc., its first big step into coal. The conglomerate now runs coal plants in Cebu, Davao, Misamis Oriental, and Bataan.

San Miguel entered the power sector in 2009 when it acquired the Independent Power Producer Administrator (IPPA) contract for the 1,200-MW Sual coal plant in Pangasinan. It now also runs coal plants in Zambales, Quezon, Bataan, and Davao.

La Viña said the country had the option to stay on its renewable trajectory, led by hydropower and geothermal. “We lost that edge when we turned to coal in panic,” he said.

“In the fork of the road, if we took the road of indigenous energy sources, we would have built that industry and then eventually reached a stage where other renewable energy, like solar and wind, can come through. But we made that mistake,” La Viña said.

One conglomerate went against the tide. First Gen Corp. of the Lopez family committed to shun coal investments in 2016. 

It was already dominant in the power sector even before the power crisis, as the previous owner of distribution utility Meralco, the country’s biggest distribution utility. It made early investments in geothermal energy and later made the offshore Malampaya natural gas project the backbone of its baseload power.

First Gen did make a bid for the Calaca coal power plant and later expressed interest in Mindanao’s first coal-fired power plant, but it failed or backed out of the deal. 

Arances recalled how then Energy Secretary Gina Lopez, since deceased, made a presentation during a board meeting of the family company to persuade her siblings and her cousins to abandon coal. “There are bright spots within [the Lopez company], but if we talk about democratization, that’s a different conversation,” he said.

The Consunji family’s DMCI acquired the Calaca plant in 2009. The Consunjis were already entrenched in construction and coal mining. Unlike others that relied on imported coal, they controlled the entire chain through DMCI Power and Semirara Mining, making theirs an integrated coal-to-power business. 

Because of its coal operations, DMCI is one of the major companies expanding coal-fired power production in the Philippines, apart from San Miguel, the Aboitiz Group, and Meralco, Arances said.

Hernandez noted the irony that although the Philippines is rich in renewable energy resources, it remains heavily dependent on coal for electricity despite not having abundant coal reserves of its own.

“We should be able to maximize indigenous resources to ensure energy security. If we discount all imported-related costs, we can see that indigenous sources are cheaper and more reliable,” he said. 

Outside of power generation, tycoons also dominate the transmission and distribution sectors.

In 2007, Monte Oro Grid Resources Corp. of the Sy family and Calaca High Power Corp. of Robert Coyiuto Jr., along with the State Grid Corporation of China, won the 25-year concession to run the country’s power transmission network through the National Grid Corporation of the Philippines.

Manuel Pangilinan’s Metro Pacific Investments Corp. took control of Meralco after the Lopez family began to cede its control of the distribution utility in 2009, amid political pressure on its media business and failure to secure a rate hike from regulators. 

San Miguel briefly held the largest bloc, but Pangilinan steadily built up his holdings and secured majority control by 2013.

LNG detour

Despite the dominance of fossil fuels in its energy mix, Aboitiz Power reports it is “one of the biggest contributors” to renewable energy power generation growth in the Philippines. “In fact, it currently has one of the largest amounts of renewable energy installed capacity at 1.4 GW, with 500 MW being brought on stream from 2023–2024,” it said in a statement. 

Meralco PowerGen said it “recognizes the urgency of the clean energy transition,” and reported installing 400 MWac (megawatts of alternating current) of net sellable capacity in seven provinces. “With current projects and an expanding pipeline, MGEN is expected to surpass its goal of 1,500 MW of renewable energy capacity by 2030,” it said. 

Energy transition is happening in the Philippines, but Arances said it is slow because “the fossil fuel industry is still holding on.” The expansion of fossil fuels has been faster than the renewable energy rollout, even as tycoons dominate both sectors, he said.

Jonelle Tan accused the conglomerates of “greenwashing.” She urged them to commit to “retiring fossil fuels on urgent timelines, respecting human rights and indigenous sovereignty, and protecting workers through job guarantees.”

She also called on the conglomerates to invest in community-led renewable projects, saying: “Our energy transition needs to be public, decentralized, and community-led.”

AboitizPower energizes new 173-MWp solar capacity in Negros Occidental.

Meralco PowerGen constructs Mterra Solar with 778 MW of solar photovoltaic panels now installed on-site.

A report in the Philippine Daily Inquirer on the 2016 annual stockholders meeting of the Lopez-owned First Philippine Holdings Corp. may offer a glimpse of how the tycoons viewed the push for renewable energy. 

Company chair and chief executive officer Federico Lopez said “some businessmen” believed the country could still build more coal plants on the basis that “the Philippines was responsible for only 0.3% of global carbon emissions.”

These businessmen argued that coal plants “reduce power costs, create more jobs and allow the Philippines to catch up with other nations and industrialize,” Lopez was quoted as saying.

On the heels of Supertyphoon “Yolanda” (Haiyan) that killed tens of thousands in the central Philippines, the Lopez Group committed that it would never build, develop, or invest in any coal-fired power plant.

In 2022, the International Energy Agency (IEA) reported that the Philippines’ carbon dioxide emissions from energy were just about 0.4% of the global total, with power generation as a major contributor.

Climate activists said the argument missed the point. “Why in the first place should the power sector transition? It’s really about our survival at the end of the day. We know what climate change brings to us,” said Arances.

Advocates of renewable energy said continued reliance on fossil fuels undermines the country’s moral and diplomatic leverage when demanding climate finance and accountability from bigger polluters.

The Philippines hosts the Board of the Loss and Damage Fund, a new UN mechanism to help vulnerable nations recover from irreversible climate impacts, giving it a key role in shaping how resources are directed.

Tan said securing funding of this kind is important. “Climate finance from the Global North is critical. Our country should not be forced into debt to pay for a crisis we did not cause,” she said.

Arances said the continued dominance of coal plants is driven by many factors, but chiefly by the fact that policy and investment decisions had been left to the private sector, whose main consideration is profit.

Lopez said as much in another report four years later, published in the family-owned ABS-CBN News in 2020. He said the decision to shut the door on coal “meant walking away from an opportunity to make profit.”

Against this backdrop, the Lopez family’s LNG investments drew sharp criticisms. The company said it could not provide fully renewable energy solutions because of supply constraints, compounded by the declining indigenous natural gas output from Malampaya.

For ICSC’s Hernandez, the energy transition is not a question of yes or no. “The question we always ask LNG proponents is: Until when? Five years, seven years? Or all the way to 2050? That’s why it’s called a transition. We’re not supposed to fully shift,” he said.

Meralco PowerGen stressed that LNG was not an “end goal,” but rather a “bridge that allows the country to transition more securely and responsibility toward a predominantly renewable energy future.”

Others reject the detour. “Every peso poured into LNG terminals or pipelines is money stolen from the renewable systems we urgently need,” said Tan. “This so-called ‘bridge fuel’ is a dangerous distraction that risks locking us into decades of more fossil dependence.”

Arances welcomed the Lopez family’s move to reduce its stakes in LNG.

Ayala Group’s transition

Amid the expansion of coal and LNG, one conglomerate—Ayala Corp.—has committed to exiting fossil fuels altogether.

Ayala is the country’s fifth largest power producer. It entered the coal business in 2011 with the construction of the South Luzon Thermal Energy Corp. (SLTEC) in Calaca, Batangas, and the acquisition of a coal plant in Bataan. 

In 2020, Ayala announced it would fully divest from coal, even as its new SLTEC coal plant had been operating for only five years.

Its moves have been decisive. It has transferred its fossil portfolio out of ACEN Corp., its energy arm, selling its Bataan coal plants and implementing voluntary early retirement on SLTEC. It is the country’s first private Energy Transition Mechanism. 

ACEN is working to reach its goal of becoming a purely renewable energy company by the end of the year, five years earlier than its 2030 commitment.

“They know where the future lies,” said La Viña, who called on other conglomerates to follow Ayala’s example. 

Arances warned that the government cannot afford to sit back and wait for voluntary pledges from private players. It must step in decisively and set the pace if the Philippines is to meet its climate targets.

First published in CoverStory — October 29, 2025