Power generation rates across most Philippine regions dropped in May 2025, according to preliminary data from the Energy Regulatory Commission (ERC), providing relief from the spike in electricity costs recorded in April at the height of the dry season.

Average generation rates charged by distribution utilities (DUs) to residential consumers fell in May, reversing the upward trend seen the previous month. In the National Capital Region (NCR), the average rate hit PhP7.8/kWh in April—the highest since 2013—but declined in May along with most other regions, except MIMAROPA and the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).

The ERC attributed the decline to a “healthy supply margin in the Wholesale Electricity Spot Market (WESM),” alongside a drop in imported coal prices and the appreciation of the peso. The system-wide average WESM supply rose to 22,218 MW in May 2025 from 19,648 MW in May 2024. Meanwhile, average demand fell to 15,169 MW from 15,688 MW, resulting in a significantly wider supply margin—up to 4,945 MW or 22.3% of supply.

Fuel cost trends also played a key role. “Indonesian coal registered its lowest monthly average price for the year at USD 115.8 per metric ton in May 2025,” the ERC noted. The peso also strengthened to an average of PhP55.6/USD, further tempering generation costs.

Since January 2023, the average electricity rate faced by consumers has declined by PhP2.4/kWh, mirroring the decrease in generation costs over the same period.

ERC Chairperson and CEO Monalisa C. Dimalanta said, “The continuing decline in generation rates since 2023 results from improved general market conditions and increased supply in the system, as well as the Commission’s diligent enforcement of rules and more timely action on filings with the ERC.”

“Even as we see these improvements, the ERC will not relax its proactive stance of close monitoring, particularly of global fuel prices, bilateral contracting and market behavior, to ensure the delivery of least-cost electricity to consumers,” she added.

What do you think of the ERC’s latest findings? Let’s discuss how these market trends could influence generation planning, investment decisions, and consumer pricing going forward.

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