Analysis: Wider supply margin fails to cool September spot prices as Visayas, Mindanao stay tight

MANILA, Oct. 13, 2026 — More power was available on the Philippine grid in September than in August, yet the average price on the Wholesale Electricity Spot Market (WESM) still went up — a pattern that points to where the system’s real bottlenecks lie.

The Independent Electricity Market Operator of the Philippines (IEMOP) said at a briefing on Tuesday that the system-wide average price for the Aug. 26–Sept. 25 billing period rose 3.1% to P7.43 per kilowatt-hour (kWh) from P7.21. Average supply grew 2.4% to 20,209 megawatts (MW) and demand 1.8% to 14,188 MW, widening the overall margin to 3,957 MW from 3,779 MW.

The national average hides a sharp regional split. Luzon, where supply rose faster than demand and the margin improved by 376 MW, averaged P5.18 per kWh. The Visayas averaged P12.42, up 5.2%, and Mindanao P12.61, down 1.4% but still the highest. Both southern regions saw margins shrink and repeated yellow and red alerts; IEMOP put unavailable capacity at 777.2 MW in the Visayas and 1,022.6 MW in Mindanao.

Transmission explains much of the gap. The Luzon-Visayas high-voltage direct current (HVDC) link operated under price separation for 77.6% of the period and at security-limited levels for 73.5%, restricting how much cheaper Luzon power could flow south. The Mindanao-Visayas link ran freely 92.82% of the time, which IEMOP said pulled Mindanao prices toward Visayas levels.

Interventions were already in play. A secondary price cap was triggered in the regions after prices breached a cumulative threshold of P12.431 per kWh, and administered pricing was imposed in the Visayas and Mindanao during the period.

On the generation mix, renewables supplied 28% of output; coal’s share fell to 51.7% from 56%, and natural gas rose to 17%, PowerPhilippines reported.

What it means for consumers

September spot prices feed into October bills. IEMOP’s Isidro Cacho Jr. said the return of major Visayas plants could ease regional prices toward roughly P9 to P10 per kWh, but cautioned that any decline may be modest. Separately, the Reserve Market suspension that began Oct. 14 is expected to reduce ancillary service charges.