Stronger electricity demand and widespread power plant outages drove wholesale electricity prices up by nearly 39 percent in May.

Data from the Independent Electricity Market Operator of the Philippines (IEMOP) released on Thursday showed the average price at the Wholesale Electricity Spot Market (WESM) climbed to P7.79 per kilowatt-hour (kWh) in May from P5.63 per kWh in April.

The increase came as electricity demand grew much faster than available supply during the peak summer season, resulting in thinner reserve margins across the country's three major grids.

"May 2026, the system-wide average supply increased to 21,374 megawatts, a 2.7 percent increase from April. Average demand also increased to 15,755 megawatts, or 9.4 percent higher than the previous month.

This supply and demand levels resulted in a lower system supply margin, leading to an increase in the system-wide average price to P7.79 per kilowatt-hour, up from P5.63 per kilowatt-hour in April 2026," Isidro Cacho Jr., IEMOP vice president for trading operations, told reporters.

System-wide supply rose by 2.7 percent month-on-month to 21,374 megawatts (MW), but demand climbed at a much faster pace of 9.4 percent to 15,755 MW. As a result, the system's average supply margin narrowed to 3,629 MW from 4,427 MW in April.

The tighter supply-demand balance was aggravated by outages across several power plants and transmission constraints that limited electricity transfers between regions.

In Luzon, average demand rose to a year-to-date high of 14,359 MW, outpacing growth in available supply.

More frequent planned and forced outages, coupled with grid alerts, pushed the region's average market price to P7.02 per kWh from P5.63 per kWh in April.

"In Luzon, the relatively higher increase in demand compared to supply led to a decline in the supply margin, driven mainly by frequent planned and forced outages, which prompted the issuance of grid alerts, consequently resulting in higher average prices," Cacho said.

The Visayas recorded the highest average market price among the three grids at P10.20 per kWh, nearly double the previous month's level, after forced outages constrained available generation and triggered grid alerts. Average demand in the region reached a year-to-date peak of 2,770 MW.

Mindanao's average market price likewise climbed to P9.28 per kWh from P5.63 per kWh as demand hit a year-to-date high of 2,808 MW.

The region continued to export electricity to the Visayas through the Mindanao-Visayas interconnection, helping support supply in the central grid.

Power plant outages remained significant throughout the month. In Luzon, forced outages peaked at 5,931 MW, while the Visayas and Mindanao recorded peak forced outages of 783 MW and 560 MW, respectively.

The higher market prices lifted the total value of electricity traded in the spot market to P29.55 billion in May from P19.47 billion in April.