Will Malampaya East-1, Camago-3 Lower Your Electric Bill? Here’s the Reality

The country announced developments involving two key natural gas sources: the newly drilled Camago-3 well within the existing Malampaya gas field, and Malampaya East-1 (MAE-1), a newly discovered reservoir located about five kilometers east of the Malampaya field off the coast of Palawan.

Photo from the Presidential Communications Office (PCO)

The discovery is being described as the country’s first “significant” gas find in more than a decade and a potential boost to the nation’s energy security, as described by President Ferdinand Marcos Jr.

But can this discovery actually help solve the Philippines’ problems with electricity prices?

What are Malampaya East-1 and Camago-3?

Malampaya East-1 is a newly discovered natural gas reservoir within the Malampaya service contract area, the same offshore energy project that has supplied power to 40% of Luzon’s electricity needs for more than two decades.

Initial drilling results show the well may contain around 98 billion cubic feet of natural gas, with early tests indicating strong production potential of about 60 million cubic feet per day.

In energy terms, that amount of gas could produce roughly 14 billion kilowatt-hours of electricity, enough to power millions of households annually.

The discovery also includes condensate, a liquid fuel that can be refined into petroleum products such as diesel, gasoline components, and jet fuel, adding economic value beyond electricity generation.

Moreover, Camago-3 is a newly drilled production well within the Malampaya gas field, tapping the existing Camago reservoir, one of the known gas-bearing areas within the Malampaya field.

Unlike Malampaya East-1, which is a new gas discovery, Camago-3 is part of ongoing efforts to maximize output from known reserves and slow the decline of the country’s primary indigenous gas source.

Marcos said Camago-3 is estimated to hold 2.5 times more recoverable gas than Malampaya East-1, highlighting its importance in sustaining near-term supply.

Together, these developments are expected to help extend the commercial lifespan of the Malampaya gas field by several more years.

While both involve natural gas, they serve different roles: Camago-3 supports current supply, while Malampaya East-1 represents a potential new source for future production.

Why does the discovery matter now?

The new find comes at a crucial time for the country. The original Malampaya gas field, which has been operating since 2001, has been gradually declining and is expected to be commercially depleted next year.

Without new gas sources, the country would have to rely more heavily on imported fuels such as liquefied natural gas (LNG), coal, or oil, often at high global prices.

According to the Department of Energy, the country imported more than 80 percent of its coal requirements in 2023 and even more than 90 percent in previous years.

How does it affect the Filipino?

These developments could potentially lower electricity prices—but not immediately.

Natural gas can be cleaner and sometimes more cost-efficient than coal, but prices depend on global markets, especially if the gas is imported. 

If Malampaya East-1 becomes fully operational, it could help stabilize supply for gas-fired power plants, which may eventually reduce electricity generation costs.

For Camago-3, any impact may be felt sooner than Malampaya East-1, as it is tied to existing infrastructure and known reserves. 

However, this does not mean immediate reductions in electricity prices, as actual costs still depend on supply contracts, plant operations, and broader market conditions.

Meanwhile, the country is heavily reliant on coal for electricity, with coal-fired power plants generating 61.9% of the country's electricity in 2023, up from 59.1% in 2022. 

Despite having natural gas as a source, it is unlikely to see dramatically lower electricity prices.

Meanwhile, Energy officials say the discovery could help power millions of homes and extend the life of the Malampaya project, giving the country more time to secure long-term energy sources.

“Every unit of power we generate from Malampaya instead of imported fuel is money saved by households, by small businesses, by every Filipino who pays an electricity bill,” Marcos said.

Several steps, however, still need to happen before consumers feel any impact, such as further drilling, infrastructure development, and commercial production approvals for MAE-1, which could take several years.

Moreover, while some think natural gas is the same as liquid fuel, it doesn’t have a direct impact on oil prices. 

In the country, oil prices are largely determined by the global market because the country imports most of its petroleum products. 

Even if Malampaya East-1 produces condensate, the volume is relatively small compared with the country’s overall oil demand.

That means the discovery will not immediately affect pump prices for gasoline or diesel. 

What it can do, however, is somehow reduce reliance on imported fuels for electricity, which indirectly helps protect the economy from global price shocks.

Bottom line

The Malampaya East-1 and Camago-3 discovery is a promising development for the Philippines’ energy sector, but it is not a quick fix for high oil or electricity prices.

In the short term, Filipinos may see little change in fuel costs. In the long term, however, the new gas supply could help stabilize electricity generation and help the country’s energy independence.

Writer: Brylle Varela

Graphics: Justine Ceniza