Philippines Gains Edge in Southeast Asia’s Green Race

By Francis Allan L. Angelo

The Philippines is emerging as a critical beneficiary in the intensifying competition among China, Japan, South Korea, and Australia to invest in Southeast Asia’s clean energy transition, according to new research by Zero Carbon Analytics (ZCA).

International investment in ASEAN clean energy has increased by an average of 15% annually since 2020, outpacing the global rate and signaling a growing race for regional influence.

As ASEAN nations push to meet a 23% renewable energy share by 2025, the Philippines is increasingly drawing targeted investments from regional powers, with China, Japan, and South Korea each playing distinct roles.

In 2024 alone, China invested over USD 400 million in Philippine renewable energy, including funding for what is reportedly Southeast Asia’s largest solar project, a 1-gigawatt facility in Manila developed by Power China.

“China’s clean energy trade dominance is well known, but its BRI-backed investments have reached record highs, including PHP 15.7 billion in the Philippines,” said Amy Kong, a ZCA researcher, citing the Belt and Road Initiative’s climate-focused pivot.

Japan, meanwhile, has become the Philippines’ largest supplier of electric buses and vehicles, while also leading regional investments in solar and geothermal technologies. Between 2013 and 2023, Japan invested USD 1.3 billion in solar and USD 142 million in geothermal across ASEAN, with strong public and private sector participation.

Japan also co-leads major regional financing frameworks, including the USD 20 billion Just Energy Transition Partnership (JETP) in Indonesia and a USD 25 million commitment to the Energy Transition Mechanism (ETM) aimed at retiring coal plants in Indonesia, the Philippines, and Vietnam.

“Japan leads in targeted clean energy financing, though its flagship Asia Zero Emissions Community has faced criticism, with over a third of signed projects including fossil-based technologies,” said Kong during a webinar on the green transition.

South Korea, while lagging in overall investment scale, has made strategic inroads as the region’s top exporter of battery components to Malaysia and Indonesia. This is a critical area for the Philippines as it builds out its transition mineral supply chain. South Korea also funded off-grid solar projects in the Philippines through the BIMP-EAGA-ROK fund.

“South Korea lacks a centralized green initiative like Japan’s AZEC or China’s BRI, but it is ramping up efforts through bilateral partnerships and emerging policies,” said Yu Sun Chin, ZCA’s senior researcher.

Australia, by contrast, is focused on interregional energy transmission, such as the Australia-Asia Power Link that will deliver solar energy to Singapore via Indonesia, offering indirect benefits for the Philippines through grid innovation and regional energy stability.

Sharon Seah of the Yusof Ishak Institute warned that intensifying U.S.-China trade tensions—especially under the so-called Trump 2.0 administration—may pressure ASEAN nations to revert to extractive industries. However, she praised China’s green regulatory model, saying, “China has shown that environmental regulation can coexist with economic growth. That’s an example ASEAN can learn from”.

Dinita Setyawati of Ember emphasized that energy transition success hinges not just on solar panels and wind turbines, but also investment in grids, labor reskilling, and consistent policy. “ASEAN needs technical infrastructure and stable regulation to attract private capital,” she said.

With the 46th ASEAN Summit set for May 26–27 in Malaysia, trade shocks and regional energy resilience will be high on the agenda. Experts see the current geopolitical climate as a pivotal opportunity for Southeast Asia to become a global hub for green manufacturing and innovation.

The Philippines, with its fast-growing economy and strategic position, is well placed to harness this momentum—if it can maintain investor confidence through consistent and transparent policies.