Regulators move to cap electricity prices under a new administered scheme as geopolitical tensions threaten fuel supply stability.
MANILA — The Philippines suspended its wholesale electricity spot market across all three national grids on Thursday, citing heightened fuel supply risks and price volatility triggered by the ongoing conflict in the Middle East.
The Energy Regulatory Commission (ERC) announced the indefinite suspension in a statement, saying it has proposed a modified administered pricing mechanism to stabilize the market while shielding consumers from potential spikes in power costs. The new pricing framework is expected to be finalized by April 1.
“Under the proposed scheme, coal plants may be paid at a fixed rate, natural gas plants based on contracted prices, and renewable energy sources such as hydro and geothermal, under administered pricing with preferential dispatch,” the ERC said.
The decision reflects deepening concern among Philippine energy authorities over the country’s exposure to geopolitical shocks. The Philippines relies heavily on imported fossil fuels, making its electricity sector particularly vulnerable to disruptions in global energy markets—especially those originating from the Middle East, a critical source of oil and natural gas.
By suspending the wholesale electricity spot market—where prices are typically determined by real-time supply and demand—regulators aim to prevent extreme price fluctuations that could cascade into higher electricity bills for consumers. The suspension applies to the Luzon, Visayas, and Mindanao grids.
The ERC said the proposed administered pricing framework is designed to balance the interests of consumers and generation companies during a period of uncertainty, with preferential dispatch given to renewable energy sources to support grid reliability while advancing the country’s transition goals.
