Philippine lignite with high inherent moisture and oxygen was upgraded by improving the slurryability through microwave irradiation. The physicochemical properties of the upgraded lignite were characterized through Fourier transform infrared spectroscopy, N₂ adsorption porosimetry, scanning electron microscopy, energy dispersive X-ray spectroscopy, and X-ray diffraction. The solid concentration of coal water slurry (CWS) that was prepared using the upgraded lignite increased from 51% to 53.4%, and the apparent CWS viscosity decreased from 862 mPa s to 687 mPa s at a shear rate of 100 s⁻¹. These results can be attributed to several reasons. (1) The inherent moisture and hydrophilicity of the upgraded lignite was reduced after microwave irradiation. (2) Hydroxyl and carboxyl, which had the strongest hydrophilicity among the oxygen functional groups, decreased, whereas the carbonyl and ether, which only slightly affected the hydrophilicity, increased. (3) The specific surface area of the upgraded lignite initially decreased because of particle expansion, which was then augmented with increasing microwave time. (4) The aluminosilicate crystalline phase was generated through the mineral interactions in the upgraded lignite, and the soluble alkali ions, such as Ca²⁺, Mg²⁺, and Na⁺, increased on the particle surfaces. It is promising to continuously upgrade Philippine lignite in a tunnel-type microwave irradiation system to improve its slurribility for industrial-scale application.