This study aims to identify potential hydropower sites and calculate the theoretical potential hydropower capacity based on watershed modelling of the Mindanao River Basin (MRB) in the Philippines for the sustainable development of a previously unstudied region. The Soil and Water Assessment Tool (SWAT) was applied to delineate the watershed of the MRB and simulate the river discharges with inputs from observed precipitation and global gridded precipitation datasets. Observed weather data, such as temperature, humidity, and solar radiation, from four meteorological stations in the Philippines were also used as inputs for SWAT modelling. Simulated discharges were calibrated at three river gauges on the Nituan, Libungan and Pulangi Rivers. However, due to limited river discharge records, model validations were conducted in proxy basins: the calibrated model parameters in river A were used in the watershed modelling of proxy river B. Of the delineated 107 sub-basins in the MRB watershed, only 33 were identified as having potential sites for hydropower development. These potential sub-basins hosted a total of 154 potential sites with an estimated monthly average power capacity of 5,551.35 MW for all 33 sub-basins. The estimated theoretical power capacity of 15,266.22 MW for all sites in the MRB is approximately equivalent to the Philippines’ total available power capacity in 2017 of 15,393 MW. These sites were classified into 16 mini-scale hydropower sites, 114 small-scale hydropower sites and 24 medium-scale hydropower sites based on the simulated river discharges and potential power capacities. Based on these results, hydropower development could be an alternative to strengthen the exploration of renewable energy resources and improve the energy situation in Mindanao; hydropower development could also have mitigation effects on frequent floods in flat, low-lying downstream areas.