After years of delays and half-powered commitments, the Philippine energy service company (ESCO) market is finally into high gear—helping energy-intensive businesses cut waste, boost efficiency, and usher them into the fast lane of green tech. And while at it, these energy efficiency frontrunners are also flexing the country into the global spotlight.

At the recent International ESCO Symposium in Istanbul, Turkey, the Philippines rolled itself onto the international stage, with energy efficiency gains solid enough to land it a spot in the 2025 Global ESCO Market Report as a “moderately growing and mature” player—a manifestation that the country is no longer just playing catch-up, but has been charging forward with sustained momentum. The Global ESCO Network, a partnership between the United Nations Environment Program Copenhagen Climate Center (UNEP-CCC) and the Efficiency Valuation Organization (EVO), convened this year’s high-level gathering, hosted by the Energy Efficiency and Management Association of Türkiye.

ESCOs are the “hitmen” of energy waste, and they primarily help businesses and organizations—such as manufacturing facilities, malls, hotels, office buildings, hospitals, and schools—use less energy and save money without the owner having to pay heavy upfront costs. Typically, they inspect establishments and find where energy is being squandered—i.e., old lights, bad insulation, inefficient heating or cooling systems—and these energy leaks serve as their battle map in prescribing solutions, including the installation of more energy-efficient equipment in these facilities.

As highlighted in the newly launched Global ESCO Market Report, “the markets of Czech Republic, Germany, Malaysia, Taiwan, the Philippines, Thailand, Spain and Belgium indicate ‘relatively mature’ ESCO activity and consistency in implementation modalities and technical performance,” and as specified, these markets have been delivering savings rates of around 30 percent.

The report further cited that the Philippine ESCO market, with 40 to 70 active projects—like Slovakia, South Korea, and Turkey—is still small but scaling up. Across Southeast Asia, the Philippines is part of the trio with Thailand and Malaysia that’s been showing solid “mid-level momentum,” even if it’s still falling short compared to the leading markets of the United States (US) and China.

In a deep dive discussion with Philippine Energy Efficiency Alliance (PE2) President Alexander Ablaza, he explained that beyond the lock-tight ESCO-enabling policy framework under Republic Act (RA) No. 11285, or the Energy Efficiency and Conservation Law, what really separates the rookies from the seasoned markets is the rise in headcount—primarily, how many ESCOs are in play, especially those with the official stamp from government or legitimately accredited organizations and associations.

According to Department of Energy (DOE) data, the Philippines had already blasted its way to 64 registered and certified ESCOs by the end of 2024—quadrupling from just 15 in 2015—and as Ablaza pointed out, that puts us neck-and-neck with Malaysia and Thailand in the mid-double-digit league.

He expounded that a true test of ESCO muscle is their ability to leverage their own balance sheets to pull in debt or equity for projects. By far, the Philippines already boasts several ESCOs solidly exhibiting their financial firepower, and the market is likewise leveling up with slick contracts like long-term energy-as-a-service (EaaS) and cooling-as-a-service (CaaS) deals, primarily for clustered cooling infrastructure.

“I feel that the local market has over a dozen ESCOs which possess this financial capability in various degrees. The Philippine ESCO market is also in its early stages of entering into more sophisticated contracting models such as long-term EaaS or CaaS agreements, especially for district cooling systems. Such sophistication is also a sign of increasing market maturity,” he stressed.

In PE2’s assessment, aging chillers in commercial buildings and industrial plants are the frontline battleground for ESCOs in the Philippines. Cooling gobbles up 60 to 70 percent of energy in most commercial spaces, and even in mid-sized factories, a relatively hefty 30 to 50 percent of energy is used up to cool their spaces and operational processes.

With reinforced relationships with clients, Ablaza reckoned that ESCOs “have learned to bundle other technologies such as lighting, motors, drives, compressors, pumps and building management systems to optimize the amount of energy savings they can ‘harvest’ from each facility. Just like any energy developer, ESCOs will naturally select the optimal technologies that will deliver an average 20- to 40-percent energy savings per system, and yet yield a decent after-tax return on their upfront capital investments.”

As the ESCO market muscles through deeper layers of complexity, it is Ablaza’s hope that their services will also expand in technological scope “to target energy savings for heat-related processes for larger industrial facilities.” He asserted that, “We would like multinational ESCOs to enter the local market which could guarantee the energy performance, operate and maintain waste heat recovery and boiler systems for heat-intensive industries such as cement, steel, glass, ceramic, pulp and paper, food, beverage manufacturing, and packaging.”

Ablaza also sees the New Government Procurement Act (NGPA) as an added springboard for energy efficiency opportunities, emphasizing that “we need to see pilot demonstration and scaled-up procurement of ESCO performance contracts by national government agencies (NGAs), government-owned and/or -controlled corporations (GOCCs), local government units (LGUs), and state universities and colleges (SUCs). It would be realistic to expect these market developments through 2026 to 2030.”

In PE2’s estimate, “at least ₱252 billion in private sector capital can be mobilized through ESCO contracts for energy efficiency upgrades in public buildings, municipal street lighting, and water utilities.”

Energy waste is burned cash and a busted future. But when Filipinos hit the brakes, energy efficiency won’t just save money—it will help save the planet, exactly why the UN Framework Convention on Climate Change (UNFCCC) ranks it one of the top three climate risk-fighting weapons.