Competition watchdogs are stepping up scrutiny of the Philippines’ retail electricity market after a new study found that market concentration, customer inertia, and structural barriers continue to limit competition despite ongoing power sector reforms.
The Philippine Competition Commission (PCC) has opened discussions with the Philippine Electricity Market Corporation (PEMC) to address key concerns identified in a market study examining competition dynamics and switching behavior among electricity consumers.
At the center of the findings is the continued dominance of a handful of large conglomerates in the retail electricity supply sector.
According to the PCC, vertical integration between power generation companies and retail electricity suppliers has helped entrench the market positions of major industry players, potentially placing smaller independent suppliers at a disadvantage.
While such arrangements are allowed under the Electric Power Industry Reform Act, the study noted that suppliers affiliated with major generators may benefit from commercial and operational advantages that are difficult for stand-alone competitors to match.
The review also found that many contestable customers remain reluctant or unable to switch electricity providers, limiting the competitive pressure needed to drive better prices and services.
Among the key obstacles identified were low awareness of retail choice programs, unfamiliarity with supplier-switching procedures, and complicated contractual arrangements.
Adding to the challenge, the study observed a pattern of “affiliate switching,” where customers move to another supplier within the same corporate group instead of shifting to an independent rival, potentially dampening the competitive impact of customer mobility.
The findings were discussed during a policy dialogue between the PCC and PEMC on May 22, where market officials noted that the concerns closely align with issues previously identified by PEMC’s Market Surveillance Committee. These include bottlenecks involving metering infrastructure and delays in processing customer transitions between suppliers.
Regulators expect competition to intensify following the Energy Regulatory Commission’s recent decision to lower the retail competition and open access (RCOA) threshold to 100 kilowatts, expanding eligibility to a broader pool of commercial and industrial electricity users.
With more consumers poised to enter the contestable market, the PCC and PEMC are moving to strengthen oversight through a proposed cooperation agreement that will cover data sharing, monitoring of pricing behavior, and coordination on potential competition issues.
The initiative signals growing regulatory attention on ensuring that the benefits of retail electricity competition translate into genuine consumer choice rather than simply reinforcing the dominance of existing industry players.
