Electricity prices in the country’s spot market slipped slightly in February, offering temporary relief to consumers, but regulators are warning that global fuel disruptions linked to Middle East tensions could quickly push rates higher.
Data from the Independent Electricity Market Operator of the Philippines (IEMOP) showed the average price at the Wholesale Electricity Spot Market (WESM) fell 1.8 percent to P3.50 per kilowatt-hour (kWh) as of Feb. 25, down from P3.56 per kWh in January.
The modest decline came as power supply grew faster than demand nationwide, easing pressure on market prices.
IEMOP data showed average electricity demand increased 3.1 percent to 12,874 megawatts (MW) during the period, while available supply rose 4.4 percent to 19,992 MW, providing a cushion that helped bring prices down.
Electricity prices moved unevenly across the country’s three main grids.
In Luzon, the country’s largest power market, the average WESM price dropped sharply by 17.2 percent to P2.69 per kWh, as supply expanded by 8 percent to 14,286 MW.
But the trend was reversed in the other grids.
In the Visayas, the average price jumped 26.6 percent to P5.37 per kWh as power supply slipped 4.4 percent to 2,256 MW.
In Mindanao, prices rose 23.2 percent to P5.25 per kWh, with supply also weakening by 3.2 percent.
WESM billing runs only until the 25th of each month, meaning the February figures do not yet reflect a full month of trading.
Despite the recent dip, the Energy Regulatory Commission (ERC) warned that electricity prices could soon come under pressure from rising global fuel costs.
In a meeting with IEMOP, regulators reviewed market simulations showing that escalating tensions in the Middle East could drive up international prices of coal, oil, and liquefied natural gas, key fuels used by Philippine power plants.
Higher fuel costs typically translate into higher offers from generators in the spot market, pushing up WESM clearing prices.
The simulations also flagged possible forced outages of large power plants as another factor that could tighten supply and trigger price spikes.
ERC Chairperson Atty. Francis Saturnino Juan said the simulations were part of the regulator’s efforts to prepare for possible volatility in electricity prices.
Among the safeguards in place is the Secondary Price Cap mechanism, which automatically limits prolonged spikes in spot market prices once regulatory thresholds are breached.
The regulator has also directed market operators to closely monitor trading activity and report any unusual behavior that could affect electricity prices.
While February’s lower WESM price may help soften electricity costs in the near term, regulators cautioned that the Philippines’ heavy reliance on imported fuels leaves power prices vulnerable to global shocks.
If fuel prices surge or supply disruptions occur, households could see higher electricity bills while businesses—especially energy-intensive industries—may face rising operating costs in the months ahead.
The ERC said it will continue coordinating with market operators and industry players to ensure market stability and protect consumers from excessive price swings.
