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Cebu’s business leaders are pressing for an urgent energy plan, warning that steep power rates and unstable supply could weaken the province’s competitiveness while its economy is growing more quickly than the national average.
Central Visayas recorded a 7.3% rise in 2024, outpacing the country’s 5.7% growth and bringing its output to ₱1.28 trillion. Cebu contributed nearly three-fourths of this total, underscoring its role as both the region’s and nation’s economic powerhouse.
At the Kapihan 2025 forum, Philippine Chamber of Commerce and Industry (PCCI) Visayas Vice President Melanie Ng stressed that reliable and affordable power is a “make-or-break factor” for companies eyeing Cebu.
She said energy costs are the first concern raised by prospective investors, with key sectors such as tourism, manufacturing, IT-BPM, and MSMEs all voicing the same worry. “This is why we are convening distributors, generators, and renewable energy providers to give businesses more options,” Ng added.
Power stability vital for Cebu’s expanding industries
Tourism officials also flagged the industry’s exposure to power problems. Lapu-Lapu City Tourism Chief Garry Lao told the forum that resorts and hotels rely on uninterrupted supply, especially with Cebu set to host the ASEAN meetings in 2026. “Power and water remain critical issues across the islands,” he said, warning that without dependable energy, the sector cannot reach its full potential.
Cebu remained Central Visayas’ leading tourist draw in 2024, welcoming 5.08 million overnight visitors. The province accounted for 67.5% of the region’s arrivals, reaffirming its dominance as a premier destination.
Meanwhile, Cebu’s manufacturing sector achieved a solid 6.6% growth in 2024, yet business leaders caution that momentum could falter without reliable energy.
Mandaue Chamber of Commerce and Industry president Marc Ynoc warned that high power costs and looming shortages threaten Cebu’s ambition to become a hub for technology and advanced industries. “A global center for high technology and innovation is always largely dependent on the electrical grid, especially with the emergence of energy-intensive AI technologies and data centers,” he noted, especially since electricity expenses make up nearly 40% of manufacturing operations.
On the IT-BPM front, Cebu remains a national powerhouse, hosting 15% of the country’s workforce or more than 160,000 full-time employees. The sector’s weight is such that Cebu City has declared March 28 as BPO Day, an ordinance passed in April 2024 to honor its billion-peso contributions and its role in creating thousands of jobs across the province and beyond.
Stabilizing energy costs
The Cebu Chamber of Commerce and Industry (CCI) is spearheading the creation of a “Utilities Alliance” to bring together businesses, utilities, and local governments in tackling soaring electricity costs. The initiative seeks to stabilize supply and pricing, amid concerns that Cebu’s power rates, higher than many of its Southeast Asian competitors, could weaken its appeal to investors.
“Our long-term goal is to bring stability to energy costs so Cebu can sustain its growth trajectory,” Ng said.
In February, the Cebu Electricity Rights Advocates (CERA) called on the Energy Regulatory Commission (ERC) to reassess the current system loss cap, saying it drives up electricity costs and threatens the competitiveness of Cebu’s business sector.
CERA convenor Nathaniel Chua pointed out that electric cooperatives face a 12% system loss limit, more than double the 5.5% cap applied to private utilities. “These losses are then transferred to consumers, resulting in disproportionately high electric bills,” he explained.
Chua also warned that passing excess charges onto consumers creates an unfair burden and can discourage utilities from maintaining strict quality standards, fostering complacency.
(Also read: Cebu to Host MGen’s New 48-MW BESS)
Energy Strains Hit Cebu
Cebu currently imports approximately 60% of its electricity from neighboring islands, including Leyte and Panay, leaving the province vulnerable to external power supply disruptions. This vulnerability became evident on August 6, when the Visayas grid, including Cebu, was placed on yellow alert as reserves dwindled.
The alert meant demand could still be met, but the system had minimal buffer for outages or surges. The National Grid Corporation of the Philippines (NGCP) reported 17 plants tripped and six others operated below capacity, cutting over 733 megawatts (MW), while a Mindanao plant shutdown reduced inflows by about 30 MW. Peak demand nearly matched available supply, leaving reserves well below the safety margin and raising the risk of blackouts by August 7.
The recent yellow alert highlights a recurring energy strain in the Visayas grid. In May 2024, outages in 16 power plants triggered similar warnings, some stemming from issues dating back to 2022 and 2023. By August, the region faced multiple yellow alerts, including four in just the first week of the month, driven by rising demand and limited supply from neighboring areas.
Chua warned that the Visayas grid’s thin reserves threaten regional economic stability, noting the lack of a sufficient safety buffer. “Cebu remains vulnerable to disruptions beyond its control, such as forced outages at power plants in other regions, technical issues, or natural disasters affecting inter-island transmission lines,” he said, adding that growing energy demand in neighboring regions further strains the system.
(Also read: Green Energy Grows in W. Visayas—But Can the Grid Keep Up?)
Fast-tracking energy projects
Cebu’s energy sector is eyeing solar, smart technologies, and efficiency programs to ease power pressures. Industry leaders stressed that strong local government unit (LGU) partnerships and streamlined approvals are vital to drive sustainable projects.
Lao noted that Caohagan, a small islet in Lapu-Lapu City, has turned to solar energy to ease power shortages and boost tourism. Since 2021, 80 households have received solar panels for lighting and device charging, while solar streetlights now brighten public spaces.
Lao said the city expects more renewable projects to expand the island’s clean energy supply, including the launch of the ₱1.2-billion hybrid battery energy storage project in the Mactan Economic Zone.
Additionally, a 187-hectare solar farm broke ground in Barangay Talisay, Daanbantayan, in March. The 150-MW project, a joint venture between Spain’s Acciona Energia and Makati-based Freya Renewables Inc., will be built under a 25-year build-transfer-operate scheme. The facility is slated to start operations by December 2026.
To safeguard the region’s power supply, PCCI called for the accelerated development of both renewable energy initiatives and baseload power. In line with this, a 169-MW expansion is currently underway at Therma Visayas Inc.’s Toledo facility.
Together with transmission improvements such as the Third Transmission Voltage Interconnection Project, these efforts aim to bolster grid reliability and sustain the province’s rapid economic growth.
Despite these initiatives, experts warn that Cebu could face recurring power strains if implementation is not swift. Highlighting the stakes, Lapu-Lapu City Rep. Junard “Ahong” Chan said, “Once power is stable, it will create a domino effect that will trickle down to a stable water supply, thereby making not only Lapu-Lapu City, but the entire province of Cebu even more attractive to investors.”
Sources:
https://www.sunstar.com.ph/cebu/unified-energy-strategy-for-cebu-pushed
https://www.sunstar.com.ph/cebu/cv-still-phs-fastest-growing-economy
https://www.sunstar.com.ph/cebu/cebu-solidifies-lead-in-it-bpm-boom
https://www.sunstar.com.ph/cebu/group-pushes-for-new-power-projects-amid-yellow-alert
https://www.philstar.com/nation/2025/08/06/2463374/visayas-grid-yellow-alert
https://www.sunstar.com.ph/cebu/group-pushes-for-new-power-projects-amid-yellow-alert
https://cebudailynews.inquirer.net/574529/yellow-alert-raised-for-visayas-grid-on-tuesday-ngcp
https://tribune.net.ph/2025/08/06/fourth-yellow-alert-grips-visayas-grid
https://www.sunstar.com.ph/cebu/daanbantayan-moves-to-renewable-energy