Energy Secretary Sharon S. Garin underscored that President Ferdinand R. Marcos Jr. ushered in a new phase of national development with the renewal of Service Contract No. 38 (SC 38) in May 2023, a decisive move that ensured the continued operation of the Malampaya Deep Water Gas-to-Power Project.
“The renewal of SC 38, a critical decision made under the President’s administration, allows the SC 38 Consortium to extend the operational life of the Malampaya facility, which would have otherwise been forced to cease production as early as 2024”, Secretary Garin said in a press conference held at Malacañang earlier today, 15 July 2025.
Without this decisive intervention, the country would have faced a greater risk of dependence on imported fuel sources, threatening the stability, affordability, and sustainability of the power supply for millions of Filipino consumers.
The renewal opens the door for continued exploration and development within the service contract area, including new drilling activities that could unlock additional gas reserves. The Malampaya Phase 4 (MP4) drilling campaign is underway, with the first gas production from the new wells targeted by 2026, just three years after the contract’s renewal. This is a notable achievement, considering that similar offshore projects typically require a five-year development timeline.
Malampaya has long played a vital role in the country’s energy landscape, having supplied up to 40% of Luzon’s electricity needs at its peak. Revenues from the project, in the form of government royalties and taxes, have provided valuable fiscal support for national development programs and infrastructure. Through this extension, the government ensures continued access to these resources, both as energy and as revenue for the Filipino people.
“This administration is committed to protecting the Filipino people from the volatility of global energy markets,” Secretary Garin said. “We are not only sustaining a vital source of indigenous energy, but also reinforcing our goal of achieving a stable, secure, and affordable energy future.”
Yesterday, Secretary Garin joined the President in an aerial visit over the Malampaya drilling rig, which is now actively boring into the seabed. The results of this effort, potentially new reserves, will be known by the end of the year.
President Marcos Jr.’s decision to renew Malampaya also signals renewed investor confidence in the Philippines’ upstream energy sector. It reflects the administration’s broader strategy of strengthening energy independence by tapping domestic resources, while simultaneously promoting the integration of renewable energy, modernizing infrastructure, and enhancing energy resiliency in the face of global disruptions.
