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Philippine Geothermal Production Co. Inc. (PGPC), the renewable energy arm of SM Investments Corp., is ramping up a multibillion-peso expansion of its geothermal portfolio as the country grapples with rising global energy risks tied to the Middle East conflict.
The company has earmarked about ₱3 billion for initial exploration activities across six geothermal-rich sites in Luzon, aiming to unlock an additional 250 to 400 megawatts (MW) of capacity over the next five to seven years.
PGPC president Napoleon Saporsantos Jr. said the initiative is part of a broader effort to strengthen the Philippines’ energy security by reducing dependence on imported fuels vulnerable to supply disruptions and price volatility.
“What we have on our radar is about 250 to 400 megawatts,” Saporsantos said, noting uncertainties inherent in geothermal development.
Key Luzon Areas
The planned expansion covers concession areas in Daklan (Benguet), Baua-Sikaw (Cagayan), Mt. Labo (Camarines Norte), Mt. Malinao (Albay), and sites in Kalinga, including Southwest Kalinga. Drilling has already begun in Mt. Labo and Mt. Malinao, marking early progress in the exploration phase.
Geothermal development remains capital-intensive and high-risk, with drilling costs reaching $10 million to $12 million per well and no guarantee of viable resources. PGPC is exploring partnerships and potential fundraising while also seeking to leverage government support mechanisms designed to de-risk exploration.
Despite these challenges, the company is pressing ahead to expand its footprint and position itself as a larger player in the domestic energy market, with potential plans to enter Mindanao.
Existing Assets
PGPC currently operates the Tiwi geothermal field in Albay and the Makiling-Banahaw (Mak-Ban) facility spanning Laguna and Batangas, with a combined capacity of nearly 700 MW.
These assets supply steam to Aboitiz Power Corp.’s AP Renewables Inc., which generates electricity for the Luzon and Visayas grids.
To provide immediate support to the grid, PGPC is expediting well workovers and drilling an additional well in Tiwi, expected to deliver an extra 20 to 30 MW once completed.
Saporsantos said the company has also suspended planned maintenance shutdowns to ensure continuous output amid tightening power reserves and rising electricity demand during the dry season.
Reducing Reliance On Imported Fuels
The Philippines remains heavily dependent on coal, which accounts for over 60 percent of its energy mix, with about 98 percent of supply sourced from Indonesia. While geothermal and other renewables offer domestic alternatives, the grid is still exposed to global fuel price swings and logistical constraints.
Saporsantos emphasized that even non-oil energy imports are susceptible to disruptions, particularly as transport costs rise during geopolitical crises.
“If we have local indigenous energy resources, we will avoid imported fuels because we still have other options,” he said.
He added that maintaining steady geothermal output is critical as supply chains tighten due to the Middle East conflict, which has already triggered concerns over fuel availability and pricing.
Geothermal’s Role In Energy Mix
As the Philippines targets a 35 percent renewable energy share by 2030, geothermal remains a cornerstone due to its ability to provide stable baseload power, unlike intermittent sources such as solar and wind.
PGPC’s expansion aligns with this national goal, reinforcing the role of indigenous energy in stabilizing electricity supply while insulating the country from external shocks.
Saporsantos said ensuring uninterrupted operations and accelerating capacity additions are essential steps in navigating current global uncertainties while laying the groundwork for long-term energy resilience.
Source:
https://www.philstar.com/business/2026/03/27/2517016/smic-unit-bets-p3-billion-geothermal-hunt
https://mb.com.ph/2026/03/25/sms-geothermal-arm-rramps-up-capacity-as-middle-east-tensions-flare
https://business.inquirer.net/581482/sms-electricity-subsidiary-revs-up-expansion