The Energy Regulatory Commission of the Philippines suspended the Wholesale Electricity Spot Market across all three national grids on March 26, 2026, replacing market-based dispatch with Special Operating Guidelines issued by the Department of Energy, one day after President Ferdinand Marcos Jr. signed Executive Order No. 110 declaring a state of national energy emergency in response to Strait of Hormuz supply disruptions. The combined actions represent the most extensive regulatory intervention in the Philippine power sector since the WESM’s establishment, removing the market-pricing mechanism that has governed electricity dispatch since deregulation and introducing a technology-specific administered pricing regime covering every category of generator on the Luzon, Visayas, and Mindanao grids.
Key Facts At A Glance
- ERC ordered WESM suspension effective interval 0005H, March 26, 2026, across all three Philippine grids: Luzon, Visayas, and Mindanao
- Suspension issued pursuant to Executive Order No. 110, signed by President Marcos on March 24, 2026, declaring a state of national energy emergency valid for one year
- DOE recommendation to suspend WESM was received by ERC on March 25, 2026, signed by Energy Secretary Sharon S. Garin
- Modified Administered Pricing Mechanism to replace WESM pricing; framework under stakeholder consultation with finalization targeted April 1, 2026
- IEMOP simulations indicate WESM prices could exceed ₱9 per kWh, up from a pre-crisis average of ₱5 per kWh or less
- ₱20 billion emergency fund activated to procure up to two million barrels of additional oil supply
- Generation companies directed to comply with a mandatory 15-day fuel inventory requirement and report supply risks to DOE immediately
- Philippines holds an estimated 40 to 45 days of petroleum product supply as of the declaration date
The Regulatory Sequence
The chain of actions linking EO 110 to the WESM suspension unfolded over 48 hours. President Marcos signed Executive Order No. 110 on March 24, 2026, citing the closure of the Strait of Hormuz and the “imminent danger of a critically low energy supply.” The order drew authority from Section 25 of Republic Act No. 7638, the Department of Energy Act of 1992, which authorizes the President to declare a critically low energy supply and direct the implementation of a fuel and energy allocation plan.
On March 25, Energy Secretary Sharon Garin signed a directive addressed to the full range of power sector participants, including generation companies, the National Grid Corporation of the Philippines, the Independent Electricity Market Operator of the Philippines, distribution utilities, electric cooperatives, ancillary service providers, and all other WESM trading participants. The directive mandated immediate implementation of fuel conservation measures, compliance with a 15-day mandatory fuel inventory, immediate reporting of any supply risk, and exploration of fuel alternatives including higher biodiesel blends for oil-based plants and coal blending or co-firing for coal-fired units.
The DOE letter recommending the formal WESM suspension reached the ERC the same day, on March 25. The ERC issued its suspension order the following morning, effective at interval 0005H on March 26, 2026.
What The Suspension Changes
Under normal WESM operations, electricity is dispatched and priced through a competitive spot market in which generators bid and the clearing price reflects real-time supply and demand conditions. With the suspension in force, that mechanism is replaced by DOE-issued Special Operating Guidelines, which impose a dispatch priority order and a Modified Administered Pricing Mechanism.
The administered pricing framework, still under stakeholder consultation as of the suspension date, introduces technology-specific rate structures. Under the proposed scheme, coal-fired plants would be compensated at a fixed administered rate, natural gas plants based on their contracted prices, and renewable energy sources including hydro and geothermal under administered pricing with preferential dispatch. Oil-based plants would be paid based on administered prices when dispatched or contracted.
ERC Chairperson and Chief Executive Officer Francis Saturnino Juan stated the rationale directly: prevailing historical market prices from January and February 2026, which would normally serve as the basis for administered prices under standing rules, would not reflect current conditions of geopolitical tensions and fuel supply constraints. IEMOP simulations indicated that under open market conditions, average WESM prices could exceed ₱9 per kWh from a pre-crisis average of ₱5 per kWh or below.
The ERC stated the modified approach aims to balance consumer protection from excessive price spikes with ensuring generators remain financially viable to sustain reliable electricity supply. The finalized administered pricing framework is targeted for April 1, 2026.
Dispatch Priorities And Generator Obligations
The Special Operating Guidelines direct the power system to prioritize dispatch of available renewable energy resources, conserve critical fuel inventories, and maintain an operational framework for system dispatch consistent with grid security requirements. Both IEMOP and NGCP’s system operator function are directed to comply with these interim measures.
Beyond dispatch priorities, the DOE’s parallel directive sets binding obligations on generation companies. Each is required to maintain a 15-day fuel inventory and immediately report any actual or potential fuel supply risk to the DOE for assessment and possible intervention. In cases where supply risks are identified, generators are directed to explore feasible alternatives including higher biodiesel blend ratios for oil-based plants and coal blending or co-firing arrangements for coal-fired facilities, subject to technical, operational, and environmental requirements.
The DOE reiterated through these measures the need to maximize dispatch from renewable energy and indigenous sources, and called for the full dispatch of coal-fired power plants to increase available capacity and lower electricity costs during the suspension period.
Emergency Fund And Supply Acquisition
Concurrent with the WESM suspension, the DOE and the Department of Budget and Management activated a ₱20-billion emergency fund under EO 110. The fund is designated for procurement of refined petroleum products, augmentation of LPG supply, and building domestic fuel inventories to as much as two million barrels. Philippine National Oil Company and PNOC Exploration Corporation are authorized to execute these procurement operations, with the capacity to make advance payments of up to 15 percent of contract values to secure supply.
President Marcos confirmed in a public address on March 25 that domestic fuel supply remained sufficient for 40 to 45 days, or until early May 2026, and directed the DOE to continue acquiring additional supply regardless. “Do not stop. Continue looking for additional supply because we do not know how long this situation will last,” Marcos said.
Scope And Duration
The WESM suspension applies to the Luzon, Visayas, and Mindanao grids simultaneously, covering the full geographic extent of the Philippine power system. It will remain in effect until the ERC, in coordination with the DOE, determines that conditions are suitable for the resumption of normal market operations. No end date has been set.
The declaration of national energy emergency underlying the suspension is valid for one year from the date of EO 110’s issuance unless extended or lifted earlier by the President.