Net installed electrical capacity as of 2001 amounted to 13,242,000 kW, of which geothermal energy contributed about 24% and oil-fired plants 47%. Total electrical output in 2000 was 43.1 billion kWh, of which 57.6% was from fossil fuels, 19.9% from hydropower, and the rest from geothermal sources. The Philippines is the world's second-largest producer of geothermal energy, which is produced on Luzon, Leyte, and Negros. Consumption of electricity in 2000 was 37.8 billion kWh. Large hydroelectric plants have been installed on the Agno and Angat rivers on Luzon and at María Cristina Falls on the Agusan River in Mindanao.
The Power Development Program (PDP) calls for capacity additions of 13 million kW during 1996–2005, at an estimated cost of $1.2–$1.4 billion per year. Several nuclear power plants have been initiated, but they were all abandoned because of ceilings on foreign borrowing and, in the case of the completed plant at Bataan, the location of the site near a seismic fault line. The government announced in 2000 that it would build a 600 MW nuclear plant similar to the Bataan plant at a different location by 2020. The Power Industry Reform Act of 2001, which mandated deregulation and eventual privatization of the power industry, had the goals of developing indigenous power sources, reducing the cost of electricity, and encouraging foreign investment.
Commercial oil deposits were found in 1978, with production beginning the following year. The largest oil production field is located at West Linapacan. Domestic production increased from1.4 million barrels in 1981 to 3.3 million barrels in 1982 but decreased to less than 0.5 million barrels in 1994. In 2001, oil production amounted to about 8,460 barrels per day, compared with consumption of 356,000 barrels per day. In October 1996, exploration began in the potentially oil-rich Cotabato Basin of the southern Philippines. As of 2002, it was expected that recent deep-sea offshore oil discoveries in the Malampaya field would substantially lessen the amount of oil imported by the Philippines. The Malampaya field also contains gas reserves estimated at 73.6 billion cu m (2.6 trillion cu ft), and development of the field to provide gas for three power plants represents the largest such project in the country's history, with one of the highest levels of foreign investment to date. At the beginning of 2002 the Philippines had natural gas reserves of 104.5 billion cu m (3.689 trillion cu ft), and the government had set a goal of increasing production to 42.4 billion cu m (1.5 trillion cu ft) per year. The Philippine government has developed an alternative energy program, including, for example, the use of "alcogas" (gasohol) and "cocodiesel" (coconut oil in diesel fuels).
In 1998, as a step toward removal from International Monetary Fund (IMF) supervision, the Philippines deregulated its oil industry, removing price controls, instituting a uniform tariff duty, and eliminating inventory requirements. However, due in part to the Asian economic crisis, the three established oil companies still controlled over 90% of the market in early 1999.