The Center for Energy, Ecology, and Development (CEED) cautioned against the notion that additional gas supply from Malampaya would lead to lower electricity rates, warning that increased fossil gas production does not automatically translate into affordable power and even risks higher energy and environmental costs.

The warning was made after President Marcos issued a statement declaring that increased supply of indigenous natural gas from the newly developed Malampaya wells could help lower electricity rates, and after the Malampaya consortium urged for more gas exploration as the Malampaya East-1 and Camago-3 wells were integrated into the Malampaya production system.

“More gas, even from domestic sources, does not necessarily mean cheaper electricity as these are not immune to the volatility of the global market. Malampaya and all other potential offshore gas remain tied to international oil and gas pricing benchmarks. The high costs of exploration, discovery appraisal, and production also translate to more capital that oil and gas companies would then seek to recover from consumers. A single exploratory well, for example, can already cost over PHP 9 billion, and only one in five usually succeeds,” explained Gerry Arances, Executive Director of CEED.

CEED pointed out that even consumers in host province Palawan have not been enjoying affordable electricity. CEED’s October 2026 report, “Don’t Drill Paradise,” found that despite absorbing the social and environmental risks from gas exploration, nearby communities receive little to no meaningful protection or benefit under policies governing gas production in the Philippines.

“Palawan remains dependent on expensive bunker fuel despite hosting gas wells in its waters and despite the Malampaya pipeline passing straight through it. It is proof that hosting fossil fuel infrastructure does not guarantee affordable power. In 2025, the Palawan Electric Cooperative recorded an average distribution utility rate of ₱16.65/kWh, while the Busuanga Island Electric Cooperative posted ₱18.32/kWh, the highest nationwide,” added Arances.

The think-tank also raised concern that the concentration of oil and gas exploration areas in the Philippines ‘last ecological frontier’ – a UNESCO biosphere reserve and major food producing region, which contributed about 7.45% of the national fisheries production in 2024 – risks major environmental costs that the government should be factoring in in weighing the benefits and risks related to highly destructive offshore gas projects. The report identified at least 14 active offshore petroleum service contracts around Palawan, raising serious concerns over threats to marine biodiversity, fisheries, and coastal livelihoods.

“Fossil gas exploration, extraction, and processing risks severe ecological degradation. Seismic surveys for gas exploration use decibel levels that drive marine wildlife away, lowering fisherfolks’ catch; the drilling of wells damages the seabed, destroying habitats; and the construction of gas infrastructure risks polluting nearby waters, worsening air quality through methane emissions, and threatening fisherfolks’ livelihood. Toxic pollution from spills is also always a threat. Moreover, the opening of new wells goes against climate imperatives to move away from fossil fuels, hampers the advancement of sustainable development pathways, and harms the climate resilience of the country by harming critical ecosystems,” said Arances. 

CEED urged the administration to prioritize affordable, distributed renewable energy rather than prolonging fossil fuel dependence at the expense of communities and the environment.

“The answer to energy security needs not compromise ecological health, community safety, and livelihoods. It must not build decades more of reliance on a finite and volatile energy source. Advancing renewables—especially distributed renewable energy systems—is the best way forward in developing our domestic energy sources, which enables us to also eliminate avoidable compromises,” said Arances.