Electricity generation rates in the Philippines dropped to their lowest since the 2022 price surge, driven by a sharp decline in Wholesale Electricity Spot Market (WESM) prices, according to the Energy Regulatory Commission (ERC). Despite higher fuel costs and a weaker peso, the national average generation rate fell to PHP 5.80/kWh in Q1 2025 from PHP 6.28/kWh in Q1 2024, offering relief to consumers across most regions.
The ERC reported a 7.7% year-on-year (YoY) decrease in the quarterly average generation rate, with Luzon and Visayas seeing significant declines of 11.5% and 8.1%, respectively. Mindanao recorded a modest 0.5% drop. Lower WESM prices, averaging PHP 3.68/kWh compared to PhP4.56/kWh in Q1 2024, offset rising costs of Indonesian coal (USD 123.80/MT from USD 120.20/MT) and liquefied natural gas (LNG) (USD 17.3/MMBtu from USD 14.9/MMBtu). A weaker peso at PHP 58/USD also posed challenges.
“The downward trend in generation rates in Q1 of this year reflects the benefits of a new or additional power supply and steady operations of the spot market. Despite external cost pressures, we saw a significant drop in average generation rates, and this demonstrates that effective market monitoring works,” said ERC Chairperson and CEO Monalisa C. Dimalanta.
Regions with high WESM exposure, like CAR (67.8%) and Region V (62.3%), saw the largest quarter-on-quarter (QoQ) reductions. However, Metro Manila, with lower WESM reliance (22.7%), faced a 3% YoY increase, while BARMM in Mindanao saw a 15.3% spike. The ERC noted that LNG’s growing share in the generation mix, reaching 19% in March, warrants further review due to discrepancies in landed costs.
Chairperson Dimalanta emphasized ongoing vigilance: “The ERC will continue to closely monitor electricity rate movements and spot market dynamics to stay ahead of emerging issues in our sector. As the country’s energy regulator, it is our mandate to ensure all stakeholders perform in a fair and transparent manner.”
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