The Visayas continues to be a major contributor to the country’s economy.
Central Visayas, comprising Cebu, Bohol, and other provinces, posted a 7.3% GDP growth in 2024, the highest among all regions in the country. This growth brought the region’s Gross Regional Domestic Product (GRDP) to approximately ₱1.28 trillion, up from ₱1.19 trillion in 2023. The services sector, particularly accommodation and food services, saw significant growth, with a 37% surge in tourist arrivals, totaling 7.52 million visitors in 2024.
Western Visayas experienced a 4.3% economic growth in 2024, reaching a GRDP of ₱641.76 billion. Notably, gross capital formation in Western Visayas increased by 11.1%, reflecting a surge in investments in infrastructure and equipment.
Between 2021 and 2024, Central Visayas showed strong growth, exceeding the national average by 1.7% in 2024. Western Visayas exhibited higher growth than the national average in 2022 but has slowed recently, with a 4.3% growth rate in 2024 below the national figure. Overall, Central Visayas is trending near the national average, while Western Visayas is gradually catching up.
Despite the economic growth, the issue of energy stability remains a persistent challenge.
“As electricity demand grows along with economic expansion, all types of plant operations—from baseload (high-capacity factor) to peaking (low-capacity factor)—must grow as well, especially as baseload and intermediate power plants will be needed to counter intermittencies from the rise of more variable renewable energy,” wrote Broadcast Journalist Jake Maderazo.
(Also read: Cebu Sectors Push for Energy Upgrades Amid Rising Demand)
Why baseload power is crucial in Visayas
Baseload power refers to the minimum amount of electricity required to be continuously supplied to the grid, 24/7, to meet the constant demand. It is typically generated by power plants that run continuously without interruption, providing reliable and consistent energy.
Coal remains the dominant source of baseload power in the Philippines, accounting for approximately 62% of the country’s total electricity generation, owing to its lower cost, reliability, and established infrastructure.
Department of Energy Secretary Raphael Lotilla underscored the Department of Energy’s strategy to make the most of the country’s existing coal infrastructure to support ongoing economic growth.
“Maximizing the use of existing energy infrastructure avoids imposing additional cost burdens on both the economy and consumers,” he explained.
Maderazo noted that the Visayas region is already making significant strides in renewable energy adoption. By May 2024, the region was home to 76 power plants, with nearly half of its total dependable capacity coming from renewable sources.
“Close to 9 out of 10 new megawatts of power generation capacity in the Visayas is expected to be from renewable sources and energy storage,” he wrote.
This marks a significant shift toward a cleaner and more sustainable energy future for the region. The growing investment in renewables not only reduces carbon emissions but also enhances energy security and supports long-term economic growth through green job creation and innovation.
Maderazo continued, “But we should also be cognizant that we still need fossil fuels to maintain the workings of our grid in providing the electricity our society needs 24/7.”
He added that energy security hinges on whether available supply can not only meet current demand but also maintain a safety cushion. However, evaluating individual power plants requires more than just output figures—it’s crucial to examine capacity factors, which measure actual energy produced relative to a plant’s maximum rated capacity.
Based on the Philippine Electricity Market Corporation’s 2023 assessment, geothermal plants show the highest consistency, operating at 65.5% to 71% of capacity. Coal follows at 57.5% to 68.5%, while natural gas ranges from 44.2% to 64.2%. Hydro varies more widely from 24.1% to 39.2%, with wind at 31%, biomass at 25%, and solar at just 20%.
Despite the Philippines’ abundant sunshine and sweeping coastlines, 2023 data painted a sobering picture: solar and wind continue to underperform, with capacity factors of just 20% and 31%, respectively—mirroring similarly low global averages of 16% for solar and 36% for wind. These figures highlight the persistent challenges of intermittency and variability in these technologies. In stark contrast, geothermal energy emerged as the country’s quiet powerhouse, delivering a robust 65.5–71% capacity factor, closely trailing the global benchmark of 82%.
“Using solar as an example, this means that out of 100 megawatts of installed solar capacity, only 20 megawatts (MW) are effectively produced,” Maderazo noted. “For solar and wind, its low- capacity factor is because of its daily, hourly or even minute per minute intermittencies; when there is no sunshine or wind, there is no power generation.”
Additionally, Maderazo argued that while energy storage can help stabilize intermittent sources like solar and wind, the high cost of storage technology often makes these setups less economically viable compared to conventional nonrenewable energy options.
“Due to the low-capacity factor of variable renewable energy like solar and wind, even if such sources are expanded, the Philippines will still need dispatchable sources like geothermal (which is unfortunately more capital intensive), as well as traditional sources like coal and natural gas, to generate consistent power, ensure grid stability, and reliability meet daily demand,” he wrote.
Focus on Cebu
As the Philippines works to strengthen its energy supply, Cebu—its fastest-growing economic center—is mobilizing local resources to keep pace with the rising power needs of its expanding IT-BPM, tourism, and manufacturing sectors.
However, Cebu still relies heavily on power imports from nearby islands like Panay and Leyte, with about 60% of its electricity sourced from plants outside Metro Cebu.
“The power demand of Cebu year-on-year is exceeding the national average,” warned Cebu Governor Gwendolyn Garcia. “If we are to even be able to match the phenomenal growth that Cebu is experiencing right now, we would have to be very serious about generating more capacity.”
Peak power demand in the Visayas is projected to rise from 2,464 MW in 2023 to 2,864 MW by 2026, and surge to 10,678 MW by 2050—half of which could come from Cebu. DoE also noted Cebu’s key role as the region’s power gateway, funneling electricity from Luzon and Mindanao to the rest of the Visayas.
Following the major blackout in Panay in early 2024 and looming power shortfalls in the next few years, Cebu Governor Gwendolyn Garcia urged the construction of new baseload plants to ensure stable energy for the province’s fast-growing economy.
Calls from business groups have also grown louder, especially after the Western Visayas outage exposed system weaknesses and caused an estimated ₱400 to ₱500 million in losses for Iloilo City alone.
Garcia declared, “We cannot be relying mainly on others for our power. We need to be self-sufficient, not in 2027 but now.”
Meanwhile, Cebu City Mayor Alvin Garcia said the city is working to secure its future power needs by encouraging existing energy firms to boost capacity. “We only have to let them expand their capacity to supply power to Cebu Island,” he added.
Metro Cebu—encompassing Mandaue, Lapu-Lapu, and Cebu cities—drives more than half of the province’s consumption, thanks to its robust economic growth.
To meet baseload needs, DoE previously stated that energy developers can still construct coal-powered plants not subject to the coal moratorium. These include projects that were already approved as committed or indicative before the 2020 moratorium was put in place.
“One of those projects will be in Cebu, and hopefully this could augment the baseload requirement in Metro Cebu,” stated DoE Assistant Secretary Mario C. Marasigan.
“We do not set aside our responsibility to ensure adequate baseload capacities in conjunction with our push to increase renewable energy’s share in the power mix,” highlighted Lotilla.
(Also read: Power Shortages in Visayas Tied to Transmission Issues)
Diverse energy mix
Energy Advocate Nic Satur Jr. believes that Cebu City and the Visayas region are facing pressing energy issues. He stressed, “The energy family and regulatory bodies should strategically focus on increasing local power generation capacity, improving grid management and infrastructure, and diversifying the energy mix.”
For Maderazo, the Visayas and the entire nation must prioritize the careful management and balanced expansion of its energy portfolio, incorporating a wide range of sources and technologies to fortify the energy grid.
“There is a delicate balance between energy security, affordability, and sustainability, and each source or technology offers its own pros and cons,” he wrote. “At its most core, the purpose of an electrical grid is to deliver continuous and reliable electricity at the least possible cost. The situation dictates that the Visayas needs to rely on a diverse mix of sources and technologies, as opposed to singularly renewable energy or singularly fossil fuel.”
Meanwhile, Garcia believes that stable energy and a thriving economy are deeply interconnected and cannot be separated.
“Power is a crucial and non-negotiable ingredient to progress,” she stated. “Power gives life to the economy. If there is a lack of [electricity], then there is no economic growth to speak of.”
Sources:
https://opinion.inquirer.net/177848/or-baseload-power-is-vital-for-reliability-and-security/
https://mb.com.ph/2024/7/15/economic-powerhouse-cebu-aligning-with-philippine-energy-security-goals
https://mb.com.ph/2024/11/8/balanced-re-and-non-re-mix-needed-to-power-cebu-and-visayas
https://www.philstar.com/business/2024/12/16/2407600/still-struggling-always
https://www.sunstar.com.ph/cebu/ngcp-cebu-needs-more-power-plants
https://business.inquirer.net/521182/central-visayas-again-tops-ncr-as-fastest-growing-region/