PesoWeekly Deep Dive
Background
Electricity prices in the Philippines are among the highest in Southeast Asia. As of 2024, Filipino households pay an average of $0.22 per kilowatt-hour (around ₱12.24). That’s almost double the price in Thailand ($0.14 or ₱8) and nearly seven times what households in Malaysia pay ($0.0312 or ₱1.78).
But why is power so expensive? In this deep dive, we break down the tangled web of imported fuel dependence, oligopoly control, broken regulation, and infrastructure bottlenecks that make your electricity bill a monthly nightmare.
1. Fossil Fuel Dependency: High Risk, High Price
Coal and Gas Dominate the Grid
The Philippines relies heavily on fossil fuels, which make up 73.56% of total electricity generation:
Coal: 42.62%
Natural Gas & Oil: 30.94%
The problem? We import most of it.
90% of coal is imported.
60% of natural gas is imported.
So when global fuel prices spike or the peso weakens, your electric bill takes the hit. There’s a direct pass-through mechanism that allows these cost changes to be transferred to consumers automatically.
Example: In December 2024, the depreciation of the peso caused Power Supply Agreement (PSA) charges to rise by ₱0.1050/kWh.
2. Oligopolies + EPIRA = Monopolistic Power
A Handful of Players Control the Market
The Philippine power sector is highly concentrated:
Just 11 families control 74.23% of generation capacity.
3 conglomerates dominate transmission and distribution.
This means there is very little competition. Meralco, for example, sources 40.2% of its energy supply from its own sister companies through PSAs.
EPIRA's Missed Promises
The Electric Power Industry Reform Act (EPIRA) of 2001 aimed to liberalize the market. It ended up enabling cross-ownership and bilateral deals that aren't always transparent.
Case in point: Between February and March 2024, WESM spot market prices in Visayas surged 42%, from ₱4.58 to ₱6.26/kWh.
3. Weak Infrastructure = Frequent Outages
Blackouts Are Commonplace
The average Filipino household suffers 28 power interruptions per year, often due to aging infrastructure and unplanned outages in coal plants.
In December 2024, forced outages in Luzon spiked by 396 MW, pushing WESM charges up by ₱0.2531/kWh.
Cost of Backup Generators
When the grid fails, people turn to diesel generators:
Diesel power can cost ₱50 to ₱70 per kWh ($0.90 to $1.26), nearly 5–6x higher than grid electricity. The cost of diesel varies depending on factors like fuel prices, location and specific power plant sources.
4. Slow Progress on Renewable Energy
Solar Potential, Wasted
The Philippines has the potential to generate 91,000 MW from rooftop solar, but it only accounts for 3.8% of the current energy mix.
Barriers to Adoption
Expensive grid connection fees
Strict limits on net metering
Lack of incentives for households and small businesses
FIT Program = More Costs
The Feed-in Tariff (FIT) scheme, designed to promote renewable investments, added ₱0.1189/kWh to consumer bills as of March 2025—a 42% increase over the previous rate.
5. Price Spikes and Rate Adjustments
Meralco’s Latest Increase
In December 2024, Meralco raised generation charges by ₱0.1839/kWh:
New total rate: ₱11.9617/kWh
For a typical household consuming 200 kWh/month, that’s an additional ₱21 (approx. $0.38)
Meralco pushed back against claims by the Department of Energy that its delayed power supply agreement is contributing to high electricity prices, calling the accusations “false and misleading.”
context.ph/2025/04/16/mer…
— #Context.ph (#@contextdotph)
12:58 PM • Apr 16, 2025
Regional Variability
Mindanao: WESM average prices rose 40% from ₱3.71 to ₱5.20/kWh (Sept–Oct 2024)
Visayas: Continued volatility due to spot market inefficiencies
6. What Needs to Change
Decentralize and Diversify
According to Skyworth PV, distributed solar systems + batteries can drastically reduce grid reliance. Since 2010, global solar costs have dropped by 85%.
Revisit EPIRA
Experts are calling for:
Reinstatement of publicly owned power assets
Breaking up vertically integrated power firms
Greater oversight on PSAs and cross-ownership
Upgrade the Grid
Modernizing infrastructure can reduce massive system losses. In October 2024, estimated technical losses amounted to ₱4.39/kWh.
Stronger Regulatory Framework
Transparent pricing in WESM
Better consumer protections
Incentives for clean energy adoption
The high cost of electricity in the Philippines is no accident. It’s the result of deep-rooted inefficiencies, monopoly power, and lack of bold policy reform. Until these are addressed, Filipino households and businesses will continue to suffer from some of the most expensive and unreliable electricity in the region.
Yes, solar is coming. Yes, there are new investments. But without structural changes in how the system is owned, priced, and regulated, those monthly spikes in your electric bill are here to stay.
Sources: (Click the highlighted words to read more)
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