Electricity prices in the Philippines may increase as global fuel prices continue to rise due to the ongoing tensions in the Middle East, the Energy Regulatory Commission (ERC) said.
Citing projections from the Independent Electricity Market Operator of the Philippines, the ERC said electricity prices in the Wholesale Electricity Spot Market (WESM) could climb if global supply disruptions persist.
According to the ERC, simulations considered scenarios involving increases in international prices of coal, oil, and liquefied natural gas (LNG), as well as possible supply constraints. Higher fuel costs may drive up WESM prices as power generators pass on these costs through their market offers.
“This is part of our proactive approach. We conduct stress tests to understand possible risks early and ensure that consumer protection mechanisms are in place should global fuel volatility persist,” ERC Chairperson and Chief Executive Officer Francis Saturnino Juan said in a statement.
“Our priority is to protect consumers from undue price volatility while ensuring a stable and reliable power supply. Preparedness remains important given the Philippines’ exposure to global energy markets,” he added.
The warning comes as global fuel prices continue to climb, with oil industry sources expecting a major pump price hike in the coming week.
The ERC said regulatory safeguards remain in place, including the Secondary Price Cap, which is automatically triggered when sustained price spikes exceed regulatory thresholds.
The commission also directed the IEMOP and its Market Operations Service to closely monitor trading activities and report any unusual or suspicious market behavior to prevent abuse of market power or opportunistic pricing.
Meanwhile, the Department of Energy (DOE) earlier said fuel prices could increase further due to global developments, including the possible closure of the Strait of Hormuz, a key global oil shipping route. The DOE said it would appeal to oil companies to stagger price adjustments starting next week.
For its part, Manila Electric Company said it is reviewing its fuel position, particularly its liquefied natural gas (LNG) supply, and assessing the potential impact of the Middle East conflict on electricity prices.
Tensions in the region escalated over the weekend after U.S.-Israeli airstrikes reportedly killed Iran’s Supreme Leader Ali Khamenei, a development confirmed by Iranian state media. Donald Trump later said military operations in Iran would continue until objectives are achieved, adding that three U.S. service members had been killed and more casualties were possible.
