Wholesale electricity prices in the Wholesale Electricity Spot Market (WESM) declined in July 2026 as improved market conditions in the Visayas and seasonally lower electricity demand helped ease market prices across the country’s three major grids.
The system-wide average supply decreased to 20,587 MW, a 2.6% decline from June 2026, while average demand also dropped to 14,936 MW, or 3.4% lower than the previous month, reflecting the typical reduction in electricity consumption during the rainy season. Overall, market conditions varied across Luzon, Visayas, and Mindanao, with improvements in the Visayas contributing significantly to lower regional and system-wide prices. Despite the decrease in system-wide average supply, the improved market conditions resulted to the system-wide average market price dropping by 13.1%, from 9.54 PHP/kWh last June 2026 to 8.31 PHP/kWh in July 2026.
The supply-demand conditions varied across the three regions. Supply margin in Luzon declined by 265 MW, while Visayas and Mindanao rose by 115 MW and 49 MW, respectively, influenced by outage levels, supply constraints relative to demand, the issuance of grid alert statuses, and changes in HVDC power flows.
In Luzon, both average supply and average demand decreased by 3.9% and 3.3%, respectively, with the region’s average price also dropping by 8.2%, from PHP 7.95/kWh to PHP 7.30/kWh. Even with lower supply levels, several large generating units experienced forced and planned outages throughout the billing period. The highest average regional price was recorded on 7 July 2026 at 22.04 PHP/kWh. The combined unavailable capacity reached 777 MW, contributing to tighter market conditions.
In Visayas, average supply slightly increased by 3.6% while the average demand declined by 4.0%. With the increased supply margin, average price decreased by 21.9%, from 14.32 PHP/kWh to 11.29 PHP/kWh. However, the slight increase in supply margin was still not enough to mitigate the nighttime peak period supply margin requirements which resulted to the continued issuance of yellow and red alerts by the System Operator (SO). The SO also declared Administered Prices on 8 July due to generation deficiencies. Despite existing system constraints, overall market conditions improved during the period as supply increased following the return of some plants from forced outage towards the latter part of this billing month.
The Visayas continued to benefit from electricity imports from Luzon and Mindanao through the Leyte-Luzon and Mindanao-Visayas HVDC interconnections. During July, operating conditions on both interconnections improved, resulting in longer periods when electricity prices remained aligned across the interconnected grids.
While power transfers continued to be managed to maintain the secure operation of the transmission network, improved interconnection flows enabled greater access to lower-cost generation from Luzon and Mindanao, helping reduce electricity prices in the Visayas.
In Mindanao, average supply and demand decreased by 0.3% and 2.9%, respectively. Consequently, average prices dropped by 18.5%, from 12.75 PHP/kWh to 10.39 PHP/kWh. The highest average regional price was recorded on 15 July 2026 at PHP 15.19/kWh. During this period, generating units were on forced outage. The combined unavailable capacity of these units reached 474 MW, contributing to tighter market conditions.
Under normal operating conditions, the Visayas grid is supported by imports from Luzon and Mindanao through the Leyte-Luzon and Mindanao-Visayas HVDC interconnections. In July 2026, the Leyte-Luzon HVDC link operated at its maximum transfer limit of 250 MW or under security-limited conditions for 40.9% of the billing period, down from 60.9% in June 2026. Similarly, the Mindanao-Visayas HVDC link operated at its maximum transfer limit of 450 MW for 26.9% compared to 39.4% in the previous month. To maintain system security and prevent overloading of the Leyte-Cebu corridor, transfers through the Leyte-Luzon HVDC link were frequently operated at security-limited levels, constraining the flow of lower-cost Luzon generation into the Visayas and contributing to price separation.
Despite these constraints, improved HVDC transfer capability increased periods without price separation. For the Luzon-Visayas interconnection, unconstrained operation rose to 53.6% of the billing period in July from 31.1% in June, while the Mindanao-Visayas interconnection increased to 73.1% from 60.7%. Greater access to lower-cost generation from Luzon and Mindanao helped reduce regional prices, with Visayas LWAP declining by 21.2% to 11.29 PHP/kWh from 14.32 PHP/kWh in June. Mindanao and Luzon LWAPs also decreased to 10.39 PHP/kWh and 7.30 PHP/kWh, respectively.
In July 2026, pricing interventions eased compared to the previous billing period. Administered Pricing (AP) was implemented only for 0.61% of intervals in the Visayas. Price Substitution Methodology (PSM) was applied for 17.62% (Luzon), 17.48% (Visayas), and 17.48% (Mindanao) of the intervals, due to continued manifestation of network congestion which resulted to extreme price separation. Meanwhile, Secondary Price Cap (SEC) was applied for 2.84% (Luzon), 2.73% (Visayas), and 2.91% (Mindanao) of the intervals, significantly lower than the levels observed in June 2026, indicating reduced occurrences of sustained high market prices. Overall, normal pricing conditions prevailed for approximately 74% of the billing period across all major grids, reflecting improved system conditions during July 2026.
“Wholesale electricity prices declined during the July billing period, particularly in the Visayas. Consistent with seasonal demand patterns during rainy months, we are observing a decline in the system demand, while generation availability improved in parts of the Visayas, contributing to lower market prices. If current supply, demand, and transmission conditions continue, market prices may remain relatively moderate. However, actual market outcomes will continue to depend on generation availability, electricity demand, and overall system conditions.”, Engr. Isidro E. Cacho Jr., IEMOP Vice President for Trading Operations emphasized.
Several generating units across all grids experienced outages throughout the month. In Luzon, forced outages across various technologies have a highest daily cumulative outage of 3,349 MW, mostly from Hydro, Coal, and Natural Gas, while planned outages across various technologies have a highest daily cumulative outage of 1,314 MW. In the Visayas, forced outages from various technologies have a highest daily cumulative outage of 975 MW, mostly from Coal and Geothermal, with 95 MW of planned outages from Geothermal. This means that Visayas relied heavily on imports from Luzon and Mindanao to meet its local demand. In Mindanao, forced outages have a highest daily cumulative outage of 743 MW, and 611 MW for planned outages from Coal and Hydro technologies.
In terms of system-wide generation, renewable energy (RE) accounted for 22% of total generation in July 2026. Coal-fired generation share slightly increased from 57.9% to 59.1%. Meanwhile, Natural Gas generation declined from 18.0% to 17.0%, while Oil-based generation decreased from 2.2% to 1.4%. Solar generation increased from 6.2% to 6.9%, supported by improved daytime conditions during the billing period. Hydro generation slightly increased from 6.2% to 6.3%, while Geothermal generation decreased from 7.7% to 7.5%. Wind generation remained unchanged at 0.5%. Pumped Storage Hydro (PSH) and Battery Energy Storage Systems (BESS) remained at 0.7% and 0.2%, respectively.
Energy spot market volume decreased in July 2026, accounting for 14.6% of total traded quantity from 15.1% in June 2026. Correspondingly, the total trading amount declined from 36.43 billion PHP to 28.07 billion PHP, driven by lower spot market volumes and a reduction in the Effective Spot Settlement Price (ESSP) from 11.30 PHP/kWh to 9.47 PHP/kWh. Despite the lower trading amount, bilateral contracts continued to account for the majority of transactions, representing 85.4% of total traded volume during the billing period.
Reserve/Ancillary Services Market
In the reserve market, reserve prices in Luzon increased across all reserve categories. Regulation Down Reserve prices rose by 15.2%, while Regulation Up Reserve prices increased by 11.3%. These were driven by reduced offered quantities, lower reserve requirements, and higher reserve market prices despite slight reduction in spot quantities. Contingency Reserve prices posted the largest increase of 63.5%, supported by lower offered quantities, higher reserve requirements, increased spot quantities, and a higher share of reserve market procurement relative to total generation. Similarly, Dispatchable Reserve prices surged by 75.7%, resulting from increased reserve requirements, higher spot quantities, and greater reliance on reserve market transactions. Overall, the increase in reserve market prices reflects tighter reserve margins and stronger reserve market participation during the billing period.
In the Visayas, reserve price movements were mixed. Regulation Down and Regulation Up Reserve prices rose by 8.4% and 14.5%, respectively, despite slightly lower offered quantities and relatively unchanged reserve requirements. The increase was primarily driven by higher reserve market contributions to total generation and increased trading activity. On the other hand, Contingency Reserve prices declined by 24.8%, largely due to a significant increase in offered quantities, higher contracted quantities, and improved scheduling adequacy, with the schedule-to-requirement ratio improving from 93% to 100%. Dispatchable Reserve prices remained nearly unchanged, decreasing marginally by 2.8%, as higher scheduled and spot quantities offset the effects of increased reserve requirements. Overall, reserve market participation increased in the region, with the reserve market share rising from 56% to 67%.
In Mindanao, Regulation Reserve prices increased while Contingency and Dispatchable Reserve prices declined. Regulation Down and Regulation Up Reserve prices rose by 19.7% and 6.9%, respectively, primarily due to lower offered quantities and higher reserve market prices despite lower spot quantities. In contrast, Contingency Reserve prices decreased by 23.7% due to higher offered quantities, slightly lower reserve requirements, and reduced reserve market participation. Dispatchable Reserve prices registered the largest decline, falling by 73.9%, driven by significantly lower market transaction values and reduced spot quantities. Contracted quantities continued to account for majority of reserve procurement, representing 86% of total scheduled reserves, which helped ease reserve price movements in the region.
