Retail electricity suppliers (RES) affiliated with power generators have inherent advantages that make it difficult for smaller players to compete, according to a study by the Philippine Competition Commission (PCC).
The anti-trust body conducted the market study to examine the competition dynamics in the retail electricity market. “If generators would prioritize supplying electricity through bilateral contracts, spot market, and retail supply agreement with their affiliate retailer, independent retailers would be left with residual supply,” the PCC said in its initial findings.
Thus, the study recommends revisiting policies on vertical integration between generation and retail distribution may be necessary to enhance competition in the retail market.
The initial findings of the market study also highlighted the barriers that limit the ability of eligible customers to switch to RES. Customers have limited knowledge of the switching process (e.g., technical and documentary requirements, and negotiating retail supply contracts). They also face delays in the procurement and installation of retail metering systems.
The study also showed a high level of “affiliate switching,” where customers move between retail suppliers affiliated with the same parent company. The PCC study noted that such practices may not signify true retail competition and recommended easing the entry of independent retailers to broaden consumer choice.
The Independent Electricity Market Operator of the Philippines (IEMOP) anticipates the lowering of the contestable customers’ required minimum monthly consumption from 500 kilowatts to 100 kilowatts in June 2026.
This initiative is expected to increase customer engagement in the retail market, which may lead to greater competition. In anticipation of this transition, IEMOP is currently enhancing its central registration system to streamline and automate customer switching requirements, including the development of an electronic-based switching system to handle the projected increase in market participants.
Already, the PCC and IEMOP held a policy dialogue on Philippine retail electricity market on March 18, 2026 to discuss the findings of PCC’s market study on competition and switching barriers in the Philippine retail electricity market.
IEMOP is the operator of the Wholesale Electricity Spot Market (WESM). It is responsible for calculating real-time market prices and dispatch schedule of participants in the WESM. IEMOP maintains a registry of contestable customers, tracks market transactions, facilitates customer switching, as well as oversees the billing and settlement procedures in the WESM.
The Electric Power Industry Reform Act, or Republic Act No. 9136, provides the legal framework that enables eligible customers to choose and source their electricity requirements from different RES. The PCC-IEMOP dialogue focused on the law’s key provisions, which implement the retail competition and open access program in the electricity market.
The PCC and IEMOP expressed interest in possible areas of collaboration, including sharing of data and research outputs, and spreading awareness of the different customer choice programs available to eligible electricity consumers.
