SMIC unit bets P3 billion on geothermal hunt

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March 27, 2026 | 12:00am

MANILA, Philippines — Amid the ongoing global oil crisis, a subsidiary of Sy-led SM Investments Corp. (SMIC) is setting aside around P3 billion to harness the country’s geothermal resources.

SMIC’s Philippine Geothermal Production Co. Inc. (PGPC) will use the budget for exploration activities in its six concession sites across geothermal-rich provinces in Luzon.

PGPC president Napoleon Saporsantos Jr. said the company aims to double its capacity over the next five to seven years and help the Philippines regain its place in global geothermal rankings.

“What we have on our radar is about 250 to 400 megawatts (MW). The reason for that range is that there is a lot of uncertainty during the development,” Saporsantos said in an interview.

The company currently has project concession sites in Kalinga, Benguet, Cagayan, Quezon, Camarines Norte and Camarines Sur.

As the first commercial geothermal power resource provider, PGPC operates the Tiwi steam field in Albay and the Mak-Ban steam field spanning Laguna and Batangas.

With a combined steam capacity of 300 MW, the assets are supplying geothermal energy to power plants owned by the Aboitiz Group.

Typically developed near volcanoes, a geothermal steam field is a source of baseload power, or the minimum amount of electricity needed on the grid to meet constant demand.

Saporsantos said PGPC’s geothermal investments come as the Philippines braces for the impact of the Middle East war on electricity rates, given its heavy reliance on imported fuel.

“If we have local indigenous energy resources, we will avoid imported fuels because we still have other options,” he said.

The Philippines has one of the most coal-dependent power grids in Southeast Asia, with coal accounting for over 60 percent of its energy mix.

On the supply side, it relies heavily on Indonesia, which supplies roughly 98 percent of its coal imports.

“The important contribution of geothermal energy in the context of the Middle East crisis is ensuring that we operate optimally,” Saporsantos said.

“Even if we say that our core energy sources do not come from oil and gas from the Middle East, these are still imported. Logistics costs will also be high when transporting coal, even from nearby countries,” he added.