Philippines Power Report Q2 2016

Philippines Power Report Q2 2016

BMI View: We expect robust growth in the power sector in the Philippines, with total generation expectedto expand by an average of 4.8% during our 10-year forecast period to 2025. With recovery from the 2013typhoon gathering pace, reasonable domestic economic growth and a range of new projects beingannounced, overall the future is looking positive for the Philippine power market.

Latest Updates And Structural Trends

Notwithstanding the adverse effects that linger from Typhoon Haiyan that struck the Philippines in late2013, we still expect to see growth in the longer term, with a range of projects including coal-fired plantsand various renewable energy constructions in the pipeline. We forecast total electricity generation growthof 5.2% in 2016, reaching 81.7TWh. Further growth throughout the forecast period means total generationis expected to reach 122TWh by 2025.

Thermal energy will continue to dominate the energy market in the Philippines, accounting for over 70% oftotal electricity generation through our forecast period. Healthy growth is expected across coal, natural gasand hydropower.

The growth in electricity generation means we expect the Philippines will be able to keep up with theexpected increases in consumption, which we forecast will grow by about 5.0% a year, although the countryis vulnerable to fluctuations and we believe the power situation will remain tenuous.