PH Power Rates Fall to Lowest Since 2022

Philippine electricity generation rates dropped to their lowest levels in three years during the first quarter of 2025, driven by cheaper spot market prices despite global fuel price hikes and a weaker peso, according to the Energy Regulatory Commission (ERC).

The national average generation rate declined to PHP 5.80 per kilowatt-hour (kWh) from PHP 6.28/kWh in the first quarter of 2024, a 7.7 percent year-on-year decrease that has eased costs for most consumers nationwide.

“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,” said ERC Chairperson and CEO Monalisa C. Dimalanta.

She added, “Despite external cost pressures, we saw a significant drop in average generation rates, and this demonstrates that effective market monitoring works.”

The ERC attributed the decline mainly to lower prices at the Wholesale Electricity Spot Market (WESM), which averaged PHP 3.68/kWh in Q1 2025, down from PHP 4.56/kWh a year earlier.

WESM is the country’s trading platform for electricity, where power distributors buy supply based on real-time demand and pricing—similar to a stock market for energy.

This price relief comes even as key fuel inputs became more expensive, including Indonesian coal, which rose to USD 123.80 per metric ton from USD 120.20/MT, and liquefied natural gas (LNG), which increased to USD 17.3 per million British thermal units (MMBtu) from USD 14.9/MMBtu.

The weakening of the Philippine peso, which averaged PHP 58 to the U.S. dollar in the period, also put pressure on generation costs due to the energy sector’s reliance on fuel imports.

Luzon and Visayas posted the largest annual declines in generation rates at 11.5 percent and 8.1 percent, respectively, while Mindanao saw a smaller 0.5 percent drop.

Regions highly exposed to WESM pricing saw the most pronounced reductions in electricity rates, with the Cordillera Administrative Region (CAR) reporting a 67.8 percent exposure and Region V at 62.3 percent.

In contrast, Metro Manila—with only 22.7 percent reliance on WESM—experienced a 3 percent increase in generation rates, while the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) recorded a 15.3 percent spike.

The ERC noted that LNG’s share in the country’s generation mix reached 19 percent in March 2025, prompting scrutiny over discrepancies in its reported landed costs.

“The ERC will continue to closely monitor electricity rate movements and spot market dynamics to stay ahead of emerging issues in our sector,” Dimalanta said.

“As the country’s energy regulator, it is our mandate to ensure all stakeholders perform in a fair and transparent manner,” she added.