Since its 2006 launch, the Philippines’ Wholesale Electricity Spot Market (WESM) has been a key driver of competition in the power sector. Yet despite its success, prices remain vulnerable to sudden price swings caused by fuel costs, outages, and weather shifts. Industry players are being urged to look beyond day-ahead trading and embrace forward contracts— agreements that lock in prices months or even years ahead—to better manage risk and support long-term investment.

“We believe that this market is a very valuable tool to support renewable energy in particular in the Philippines,” said David Koger, Head of Business Development at Green Tiger Markets (GTM). 

Speaking at the 3rd Philippine Renewable Energy Conference in Manila, Koger highlighted the Philippines’ competitive power market as one of Southeast Asia’s most dynamic—a strong foundation for adopting forward trading faster than some regional peers.

Forward contracts have long been integral in Singapore’s electricity market, one of the region’s most liberalized. There, retailers and large buyers secure fixed-price packages through a mix of physical and financial trades, gaining long-term cost visibility and protection from price swings.

Vietnam, while still developing its competitive market, has piloted bilateral contract models alongside a growing spot market to ready its grid for increasing renewable integration. These measures aim to smooth sharp price fluctuations that could deter investor confidence.

“Forward markets in places like Singapore show that price stability doesn’t have to come at the expense of competition,” Koger said. “The Philippines can leapfrog by adopting tested strategies from its neighbors while tailoring them to local conditions.”

The country already has emerging tools aligned with this approach. Under the Green Energy Auction Program, developers can secure 20-year supply contracts, although explicit Contracts for Difference (CFDs) are not yet integrated.  

Green Tiger Markets has launched the Philippines’ first exchange-based forward electricity market, offering financially settled CFDs. These allow generators, retailers, and large consumers to hedge WESM price volatility without physical delivery. 

“We let companies hedge electricity prices months and years into the future. Our market started trading in July of 2023, about two years ago… and today we work with roughly 50% of the Philippines energy market–a mix of generation companies, distribution companies, all types of different participants in the energy market,” Koger said.

This concept has proven effective overseas. In Australia’s National Electricity Market, widely regarded as one of the world’s most advanced wholesale power markets, renewable operators use forward agreements to secure multi-year revenues even during low-output periods. European utilities rely on similar contracts to hedge against seasonal demand spikes and fuel disruptions.

Koger emphasized that forward markets are about disciplined risk management rather than speculation. “They are a sign of a maturing power sector,” he said. “They give stakeholders the confidence to invest and innovate.” This model has helped accelerate renewable integration in markets like Australia while maintaining investor interest.

For the Philippines’ renewable energy market, forward contracts could enable solar and wind operators to smooth seasonal variability, help hydropower producers offset drought-driven shortages, and allow merchant plants to lock in revenues for uncontracted capacity.

Consumers also stand to benefit. Distribution utilities and large industrial users could protect themselves from sudden price surges, while portfolio owners can balance exposure across diverse regions and technologies, a crucial advantage for an archipelago with varying grid conditions.

“Markets don’t become liquid overnight,” Koger acknowledged. “It takes education, participation, and trust. But once in place, these mechanisms can balance the needs of both producers and consumers.”

About Andrew Koger
Andrew Koger is the Head of Business Development at Green Tiger Markets, which operates financial markets for energy and commodities, including the Philippines’ electricity hedging market. With over a decade of experience investing and operating in emerging markets, he founded a leading fintech software company in the Philippines that was acquired in 2025. Prior to GTM, Andrew led business development for Alibaba Philippines and began his career as an investment analyst at an emerging markets-focused hedge fund in New York. He holds a degree in Economic History from Princeton University.

About Green Tiger Markets
GTM is a Singapore-based derivatives marketplace offering financially settled electricity forward contracts designed to help Philippine market participants hedge price risks, improve cost visibility, and enhance market liquidity. GTM facilitates both physical and financial contracts and provides a transparent, regulated venue for securing long-term supply arrangements and managing price volatility.

The company has been conducting “Hedging 101” roadshows across the Philippines, educating participants from independent power producers to commercial and industrial buyers on practical strategies to manage price risk.

For more in-depth analysis, detailed case studies, and real-world examples of forward trading in action, explore our Market Insights section, brought to you in collaboration with GTM.