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Forty-eight distribution utilities (DUs), or local energy providers in the Philippines, charge consumers higher electricity rates than the record-high national average rate of P12.43 per kilowatt-hour (kWh) in June, according to a study by an energy advocacy group.

The Institute for Climate and Sustainable Cities (ICSC) gathered and analyzed the data through its electricity rate monitoring platform, PRESYO-PH, which records and ranks distribution utilities every month based on the actual price their customers pay per kWh.

The group’s analysis followed the Department of Energy’s announcement on Monday, July 20, that the Philippines now has the most expensive power rates in Southeast Asia. The country has already surpassed Singapore’s P0.09 per kWh, which used to be the highest in the region.

ICSC said, however, that the national average rate does not reflect the reality faced by most Filipino consumers, as higher residential charges from DUs indicate that most households are paying more for electricity than the benchmark.

DUs with above-average rates

ICSC records the electricity rates of 116 DUs in the Philippines. Ten of these are off-grid, while 106 are on-grid.

On-grid DUs are connected to a main transmission network and can draw or supply electricity without local battery storage. Off-grid DUs, on the other hand, operate in remote areas and islands independently of the main transmission network.

Generally, on-grid DUs are expected to charge less because they are more cost-effective than off-grid DUs, which are heavily reliant on imported fossil fuels, local generation and battery storage to meet consumer demand.

However, out of the 106 on-grid DUs, nearly half, or 48, charge their customers electricity rates higher than the national average in June.

TARELCO I in Tarlac has the lowest rate among those above the national average at P12.45 per kWh, while Southern Leyte’s SOLECO charges P16.57 per kWh, the highest.

Meralco, the largest private energy company in the country, ranks ninth, charging its customers P14.48 per kWh.

Generation charge

This July, consumers are facing higher electricity charges.

Meralco alone, which holds 80% of the market share, announced on July 10 an upward adjustment of P0.3428 per kWh, bringing the overall rate to P14.8261.

This translates to an increase of P69 in the electricity bills of households consuming 200 kWh.

ICSC said generation charges consistently make up the largest portion of what consumers pay for electricity. Based on its data, generation charges account for at least 46% of the rate mix of distribution utilities, while other costs make up the rest.

The group said this indicates the country’s need to reduce its dependence on imported fuels. According to the US International Trade Administration, liquefied natural gas, a critical transition fuel in the Philippines, accounts for 22% of the country’s power generation in 2026, resulting in increased imports that make up 46% of the natural gas feedstock.

The group further emphasized that, beyond that, diversifying the country’s power mix by using indigenous renewable energy resources is also highly needed.

‘Beyond reducing exposure to imported fuel price volatility, a more diversified power mix can strengthen the country’s long-term economic competitiveness, enhance resilience to external shocks, and improve the well-being of Filipino consumers,’ ICSC’s study read.

Returning to Manila after two years, I find both a country and a region pulsating with dynamism. Few developments have reshaped the international order as profoundly as the rise of Asia. Over the past few decades, the Asian continent has cemented its position as a center of economic growth, technological innovation and strategic presence. Within this landscape, Southeast Asia stands out, propelled by ASEAN’s centrality, in an upward movement that turns diversity into dialogue, and dialogue into integration.

The choice for integration over rivalry has paid off handsomely. Over the last decade, ASEAN economies have sustained an average annual GDP growth rate of roughly seven percent, nearly doubling their economies in purchasing power parity terms; the G7, by contrast, posted average growth of just 4.8 percent over the same period. While many advanced economies grapple with the challenges of rapidly ageing populations and shrinking workforces, much of Southeast Asia continues to enjoy a favorable demographic dividend, its expanding, working-age population actively driving innovation, productivity and long-term growth. These are the strengths that make ASEAN a core engine of the global economy, and Brazil has followed this trajectory with genuine admiration and interest.

Our connection, however, runs deeper than economic expectations. It dates back to 1946, when we established diplomatic relations with the Philippines, our very first bilateral tie in the region. Decades later, in 2012, Brazil became the first Latin American country to accede to the Treaty of Amity and Cooperation in Southeast Asia (TAC). These two landmarks lend particular significance to my visit today, as we celebrate the 80th anniversary of diplomatic relations with the Philippines and honor the 50th anniversary of the TAC.

Under President Luiz Inácio Lula da Silva, engagement with ASEAN has become a clear priority of the Brazilian foreign policy. We now maintain embassies in nine of the 11 ASEAN member-states, and our partnership follows a concrete roadmap: in 2023, Brazil and ASEAN agreed on Practical Cooperation Areas for 2024-2028, the reference document guiding our joint initiatives. In 2024, Brazil became the first Sectoral Dialogue Partner to accredit a designated ambassador to ASEAN, consolidating our institutional presence in Jakarta.

The ASEAN-Brazil Sectoral Dialogue Partnership is delivering tangible results, both with ASEAN as a whole and with its member-states. Since the Practical Cooperation Areas were adopted in December 2023, our collaboration has expanded rapidly across 11 priority sectors, from science and technology to renewable energy, education and women’s empowerment. This dynamic agenda has been matched by an unprecedented rise in high-level exchanges, missions and technical dialogues, culminating in President Lula’s historic participation in last year’s ASEAN Summit in Kuala Lumpur.

Sustainable development and social inclusion sit at the very core of the ASEAN-Brazil relationship. This September, Brazil will welcome a delegation of women agricultural leaders, selected by the ASEAN Secretariat, for a capacity-building program on women’s leadership within agricultural cooperatives, an opportunity to share our experience in empowering women and strengthening rural communities through cooperative production arrangements. In parallel, our joint bioenergy project is advancing into its next phase, focusing on sustainability criteria and certification schemes.

Environmental cooperation is another area that holds great potential. We are working to connect the ASEAN One Billion Trees Growing Program with Brazil’s Tropical Forest Forever Facility (TFFF), officially launched last year at COP30 in Belém, at the heart of the Brazilian Amazon Rainforest. This alignment of existing initiatives opens new avenues for collaboration on forest conservation and climate finance. We deeply value the early engagement already shown by ASEAN member-states and look forward to ASEAN’s continued support in broadening regional participation, helping the mobilization of eligible tropical forest countries and potential sponsoring partners across the Asia-Pacific.

Much has been achieved, yet more lies ahead. During his visits to Malaysia and Indonesia last year, President Lula formally expressed Brazil’s commitment to deepening ASEAN-Brazil relations and elevating it to the level of a Dialogue Partnership, a step that would be consistent with the strategic importance Brazil attaches to ASEAN and Southeast Asia as a foreign policy priority. As we pursue this higher level of ambition, we reaffirm our long-term commitment to a dynamic, resilient and forward-looking relationship.

On this milestone 50th anniversary of the Treaty of Amity and Cooperation, Brazil reaffirms its dedication to the Treaty’s founding principles: mutual respect for sovereignty and equality, non-interference, the peaceful settlement of disputes, the renunciation of the threat or use of force and effective cooperation among the High Contracting Parties.

At a time of rising geopolitical tensions and economic fragmentation, Brazil and ASEAN share a firm conviction in the vital role of multilateralism in addressing global challenges. We stand united in advancing sustainable development, promoting a fair energy transition, eradicating poverty, mobilizing climate finance and pursuing the reform of international governance. We look forward to the next chapter of our partnership.

A sharper-than-expected minimum wage increase and renewed pressure from a weaker peso and volatile oil prices could keep Philippine inflation elevated for longer, complicating the Bangko Sentral ng Pilipinas (BSP)’s efforts to bring price growth back within target.

In a report, GlobalSource Partners country analyst Diwa Guinigundo said the simultaneous domestic and external inflation shocks could reinforce each other, creating a ‘more complicated policy environment’ for the central bank.

‘These could delay the return of inflation to target, underscoring the importance of maintaining credible monetary policy and keeping inflation expectations well anchored,’ Guinigundo said.

The National Capital Region’s approved minimum wage adjustment reached about 12 percent, twice the six-percent increase assumed in the BSP’s baseline projections.

The P85 daily increase will be implemented in two stages, with P60 taking effect on July 25 and the remaining P25 in January 2027.

The adjustment carries broader economic implications as Metro Manila accounts for the largest share of the country’s output and formal employment, according to Guinigundo.

Based on the BSP’s preliminary estimates, every additional peso in the minimum wage raises inflation by about 0.0047 percentage point. This means the full P85 increase ‘could add roughly 0.4 percentage points to inflation’ through direct or first-round effects alone.

Guinigundo said the bigger risk would come from possible second-round effects, including wage adjustments in other regions, higher production and transport expenses and increases in food and service prices.

Price pressures could become more persistent should households and businesses begin expecting inflation to remain high, prompting workers to demand higher wages and companies to pass additional labor costs on to consumers.

Meanwhile, external developments could add another layer of inflationary pressure.

BMI, a unit of Fitch Solutions, has projected that the peso could weaken to between P61 and P63 against the dollar. Although the effect of currency depreciation on inflation has declined, a sustained peso decline would still increase the local cost of imported fuel and food.

The country is particularly vulnerable to oil price shocks as more than 95 percent of its petroleum requirements are imported. Any prolonged disruption to oil supply could quickly translate into higher fuel, transportation and production costs, eventually feeding into consumer prices.

‘Should these shocks intensify or prove more prolonged than currently anticipated, the return of inflation to the BSP’s target range could be pushed even further into the future,’ Guinigundo said.

The former BSP deputy governor said monetary policy would likely remain cautious as the BSP balances the need to support economic activity with its primary mandate of maintaining price stability.

However, he said monetary policy alone would not be enough to address the country’s inflation problem.

‘Policy coherence, not monetary policy alone,’ he said, would determine how quickly inflation returns to low and stable levels, with the government also needing to strengthen energy security, improve food supply and raise productivity.