Energy drain

Even the energy sector — comprising electricity and fuel purchases — is being tempered by the current corruption scandal.

Market brokers are taking a neutral view on the power sector as spot electricity prices persist.

The slowdown in demand is attributed to a widening supply-demand balance and weak electricity consumption.

Within the sector, it is only the transmission segment, which means the National Grid Corporation of the Philippines, “which offers resilient regulated earnings and better insulation from current market headwinds.”

According to Nosy Tarsee’s informants in the sector, the slump is problematic because 2026 capacity additions are projected at 6.2-gigawatt hours (GW), the largest in at least five years, lifting installed electricity-generating capacity by 16.4 percent from a year ago and generation output by 8.8 percent.

With electricity demand expected to grow by only two percent despite a double-digit capacity buildup, the supply-demand imbalance may result in losses for power firms, the largest of which at the moment is San Miguel Global Power.

With benign fuel costs, electricity prices will remain subdued, with potential declines of 11-16 percent in 2026 and 2027.

According to MayBank Research, the Energy Regulatory Commission’s approval of a P6.6-billion rise in NGCP’s maximum allowable revenue improves earnings visibility, while its listed affiliate, Synergy Grid and Development, remains relatively insulated from the effects of the economic skid.