Philippine WESM spot prices rise in October as Luzon supply tightens
Philippine wholesale electricity prices are climbing in October as tighter supply margins and higher demand lift trading costs in the spot market. System-wide prices average P8.79 per kilowatt-hour, while Luzon posts the sharpest increase and the Visayas and Mindanao record declines.
Highlights
- Wholesale Electricity Spot Market average price rises 18.4% month-on-month in October to P8.79 per kilowatt-hour as demand outpaces supply.
- Luzon experiences a 51.2% spot price surge to P7.83 per kilowatt-hour, driven by 6.9% higher demand and a 0.9% supply drop to 14,972 megawatts.
- IEMOP reports Visayas and Mindanao spot prices in October reach P11 per kilowatt-hour, nearly double the P3–P6 range from a year earlier.
October market movements across the grid
As reported by BusinessWorld, citing the Independent Electricity Market Operator of the Philippines, the average electricity price in the Wholesale Electricity Spot Market rises 18.4% month on month in October to P8.79 per kilowatt-hour. Available supply increases 1.4% to 20,493 megawatts, while demand grows 4.3% to 14,793 megawatts.Luzon records the steepest price increase, with spot prices rising 51.2% to P7.83 per kilowatt-hour. Available supply there declines 0.9% to 14,972 megawatts, while demand climbs 6.9% to 10,580 megawatts.
At a briefing on Wednesday, Rica O. Cagnayo, a trading operations for market simulation and analysis staffer at IEMOP, says tighter supply margins caused by rising demand, reduced generation availability, and both planned and forced outages are pushing prices higher. In the Visayas, prices fall 9.9% to P11.19 per kilowatt-hour as supply rises 8.7% to 2,392 megawatts and demand slips 0.6% to 2,087 megawatts.
Mindanao spot prices decline 12.3% to P11.06 per kilowatt-hour. Supply in the region rises 8.1% to 3,129 megawatts, while demand decreases 2.9% to 2,126 megawatts.
Supply constraints keep pressure on power costs
IEMOP, which manages the spot market used by power firms when long-term supply contracts fall short of customer demand, says electricity prices have risen significantly this year. Isidro E. Cacho, Jr., the company's vice-president for trading operations, says prices in the Visayas and Mindanao reach around P11 per kilowatt-hour in October, up from about P3 to P6 per kilowatt-hour a year earlier.In Luzon, prices are at P7 to P8 per kilowatt-hour over the same period. Cacho says the increase reflects a combination of stronger demand and supply constraints, factors that continue to translate into higher market prices.
Previously, we outlined the main factors behind Philippine bond reforms aimed at improving liquidity and attracting more investors.
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