Electricity prices in the Wholesale Electricity Spot Market (WESM) rose in December 2025 even as overall power supply increased and demand slightly declined, according to data from the Independent Electricity Market Operator of the Philippines (IEMOP).

System-wide average supply climbed to 20,233 megawatts (MW) in December, up 1.2% from the previous month, while average demand slipped to 13,440 MW, down 0.5%. This resulted in a wider supply margin—the buffer between available power and actual demand—at 4,798 MW.

Despite this wider margin, the system-wide average electricity price increased to PHP 4.38 per kilowatt-hour (kWh) from PHP 3.98/kWh in November. IEMOP said this was driven by tighter conditions and price spikes in the Visayas and Mindanao, which offset easing prices in Luzon.

In Luzon, higher supply and lower demand led to cheaper electricity. Average supply rose to 14,422 MW while demand fell to 9,324 MW, pulling the average price down to PHP 2.98/kWh from PHP 3.52/kWh. This reflects how stronger supply margins tend to reduce spot market prices.

Conditions were different in the Visayas, where demand grew faster than supply. Average supply increased to 2,524 MW, but demand jumped to 1,978 MW, tightening margins and pushing the average price up to PHP 7.22/kWh from PHP 5.29/kWh.

In Mindanao, supply declined to 3,287 MW while demand rose to 2,137 MW, leading to even tighter margins. As a result, the average price surged to PHP 7.82/kWh, up from PHP 4.99/kWh the previous month.

Due to sustained high prices, the secondary price cap—a market safeguard that limits excessive spot prices—was triggered for 213 trading intervals in the Visayas and 216 intervals in Mindanao. Each interval represents a five-minute trading period in WESM.

IEMOP also reported that the Effective Spot Settlement Price (ESSP)—a measure reflecting the final price paid for spot market transactions—rose to PHP 5.55/kWh from PHP 4.57/kWh. Spot market purchases accounted for 13.2% of total traded electricity, up from 12.3%, while the total value of trades increased to PHP 14.19 billion.

On the supply side, renewable energy accounted for 26% of total generation during the period. Coal’s share increased to 56.4%, while output from wind, solar, and geothermal plants also rose. In contrast, hydropower generation declined, while natural gas output fell and oil-based generation slightly increased.

Only one market intervention was recorded during the billing period, occurring on December 13, after a technical issue prevented the system from generating real-time dispatch results. Market interventions are rare actions taken to maintain system reliability.

IEMOP said reserve market activity—which covers standby power used during plant outages or sudden demand spikes—declined in December, with total reserve market transactions falling to PHP 3.92 billion from PHP 4.10 billion.

How do changes in supply, demand, and generation mix translate into the electricity prices consumers see on their bills?

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