Table of Contents
As the Philippines moves deeper into 2026, the Visayas region is confronting a looming energy challenge that could reshape the economic and social landscape of its economic centers, like Cebu, Panay, and Bohol. Long‑standing concerns among energy officials, industry leaders, and economists have aligned around one stark reality: electricity demand is growing faster than supply, making reliable power a pivotal issue for the region’s future.
“There’s a potential critical supply situation in the Visayas, based on the initial simulation of demand-supply,” warned Department of Energy (DOE) Mylene C. Capongcol. She added that the balance between supply and demand will largely hinge on how much new capacity is added and the effectiveness of measures to manage electricity consumption.
While the DOE cautioned that the region’s power reserve margins may tighten to “critical” levels this year, the Independent Electricity Market Operator of the Philippines (IEMOP) projected that Visayas’ power supply will be under pressure, primarily because it depends heavily on electricity imports from the Luzon and Mindanao grids.
“The Visayas is a net importer of power from Luzon and Mindanao, so when interconnection from Mindanao and Luzon are limited, power plants end up setting higher prices in the Visayas,” explained IEMOP Vice-President for Trading Operations Isidro E. Cacho, Jr.
This also means that any unexpected drop in generation in Luzon or Mindanao could quickly ripple into the Visayas, making the region the first to experience supply shortfalls.
(Also read: Meralco Power Academy Ignites Future Leaders in Engineering Across Visayas & Mindanao)
A region growing faster than its grid
Visayas has shown strong and sustained economic performance in recent years, with multiple regional economies expanding faster than the national average.
Central Visayas, which includes Cebu and Bohol, has emerged as one of the country’s most dynamic regional economies. In 2024, the region maintained a robust 7.3% in Gross Regional Domestic Product (GRDP), making it the fastest‑growing economy among all 18 Philippine regions. This pace outstripped the national growth rate of about 5.7%.
Meanwhile, the Eastern Visayas region demonstrated steady economic performance, recording a 6.2% growth, placing it among the top five fastest‑growing regional economies in the country. Eastern Samar recorded notable growth exceeding 10%, marking it among the standout local economies.
Western Visayas also continued its economic progress in 2024, even following the administrative reconfiguration due to the creation of the Negros Island Region (which removed Negros Occidental from its data). The region’s GRDP reached ₱641.8 billion, with a 4.3% growth rate — modest but still positive given the shifting economic baseline.
As the region’s economy grows, the need for a reliable energy supply becomes even more critical. According to IEMOP forecasts, Luzon and Mindanao are expected to maintain relatively stable supply conditions in 2026, while Visayas remains susceptible to volatility tied to transmission constraints and unplanned plant outages.
IEMOP’s 2026 projections indicate that Luzon’s spot electricity prices could remain around ₱5 per kilowatt/hour (kWh) under normal conditions. In the Visayas, however, thinner reserves and a heavier reliance on batteries and diesel for backup could push prices up to ₱6 to ₱7/kWh if forced outages occur.
“If we encounter what happened last year… we will see not just in Visayas, but I think even in Luzon,” said Head of Trading Operations Isidro Cacho Jr., referencing periods when several thousand megawatts (MW) of capacity went offline simultaneously, highlighting the region’s vulnerability to sudden supply disruptions.
Why yellow alerts matter
A yellow alert is not yet a blackout, but it signals that the available supply is dangerously low relative to demand. In 2025 alone, the Visayas grid entered yellow alert status eight times, a stark contrast to Mindanao, which recorded just a single yellow alert.
Capongcol explained that although widespread blackouts are not expected, the Visayas grid could continue to experience yellow alert episodes this year, with their frequency hinging on how quickly electricity demand rises and how much new capacity comes online.
“Based on what I initially saw, there would be some episodes of yellow alerts,” she predicted. “But again, it depends on the demand projections and the available capacity—whether there will be additional capacities that can come online, or whether we will be able to address this through demand-side programs.”
Frequent yellow alerts signal vulnerability in the supply that can affect both businesses and investors. Thin reserves often drive higher spot market electricity prices, raising operating costs for energy-intensive industries and making regions with frequent alerts less competitive compared with areas that have more stable power.
From an investor’s perspective, recurring yellow alerts are a sign of structural challenges in the grid, such as limited generation capacity, aging plants, or constrained transmission infrastructure. This can influence long-term investment decisions, particularly for industries that require reliable, 24/7 power, like manufacturing, IT-BPO, and export-oriented operations.
Regions with frequent alerts may face hesitancy from investors, additional costs for backup systems, and slower economic growth, highlighting how grid reliability directly impacts competitiveness and business confidence.
Cebu: Beacon of growth, but power weaknesses loom
Cebu’s booming BPO industry has become even more dependent on stable, high‑quality power as it grows into one of the largest employment hubs outside Metro Manila, with well over 160,000 workers fueling economic activity across call centers, back‑office operations, and IT‑enabled services.
Cebu’s power demand currently stands at 1,223 MW, while local generation can supply only 1,123 MW, according to the DOE. The resulting 100‑MW shortfall forces the province to rely on electricity from the broader Visayas grid, which leaves the IT‑BPM sector particularly exposed.
Industry leaders also emphasize that the sector’s around‑the‑clock operations, built on a deep talent pool and modern infrastructure, cannot function effectively without continuous baseload electricity. Even minor interruptions risk disrupting service delivery, eroding client confidence, and compromising Cebu’s competitive edge in the global outsourcing market.
A steady power supply also supports job security and protects the thousands of livelihoods tied to the sector, while reducing the need for costly backup systems that elevate operating costs for firms and families alike. Reliable energy is increasingly viewed not just as an operational necessity but as a cornerstone of sustainable growth, investment attraction, and long‑term competitiveness.
In 2025, Cebu was rocked first by a magnitude‑6.9 earthquake in late September and then by Typhoon Tino in early November, compounding the physical and economic toll on the province. The quake caused widespread damage to infrastructure, with power lines downed and dozens of power plants tripping offline, reducing the grid supply by 1,444.1 MW and prompting a Visayas grid yellow alert and temporary disruptions in many communities.
Against this backdrop, stable and resilient power is central to Cebu’s broader recovery efforts, not just for business continuity but for basic community stability. Reliable electricity supports hospitals, water systems, communications, and transportation, all of which were hampered during the twin disasters and are critical for long‑term rehabilitation and economic rebound. Government and industry groups have highlighted the need to reinforce grid infrastructure to withstand future shocks, linking disaster readiness to sustained economic performance and investor confidence.
(Also read: Sunlight to Sustenance: Solar Irrigation Boosts Farming in Capiz)
Ongoing efforts
Efforts to expand transmission infrastructure, upgrade substations, and integrate additional generation capacity are ongoing in parts of the Visayas.
The National Grid Corporation of the Philippines (NGCP) is expanding key substations across Cebu ,including Calong Calong, Toledo, Umapad, Samboan, Daanbantayan, Compostela, and Pusok. As of August 2025, the Cebu-Lapu-Lapu 230 kilovolt (kV) Transmission Line Project was 68% complete, while the Lapu-Lapu 230 kV Substation Project reached 69%, with both slated for completion by December 2026. The Visayas Substation Upgrading Project (VSUP) is also underway, forming a critical part of NGCP’s long-term plan to enhance grid stability and meet Cebu’s rising energy needs.
However, Cebu’s business leaders are intensifying calls for a unified energy strategy to sustain the province’s growth. Philippine Chamber of Commerce and Industry (PCCI) Visayas Vice President Melanie Ng said power remains a “make-or-break factor” for investors weighing entry into Cebu.
“When we talk to new businesses, the first questions are always about energy costs and reliability,” she said, noting that Cebu’s top industries all cite power as a top concern. “This is why we are convening distributors, generators, and renewable energy providers to give businesses more options.”
Meanwhile, the Cebu Electricity Rights Advocates (CERA) pressed the government to fast-track new power projects in the Visayas. The group called for accelerated development of both baseload and renewable energy projects to secure the region’s electricity supply and support long-term economic stability.
Therma Visayas Inc.’s coal plant in Toledo City is undergoing a 150 MW expansion, boosting capacity to 450 MW. Additionally, a 73‑MW coal plant being developed by Meralco PowerGen’s Toledo Power Corp. is slated to begin construction as early as 2026 and could add another cushion of dependable generation by 2028.
Scaling renewables in the Visayas is also seen as a key strategy to improve energy stability. The region is seeing major clean energy investments, including a 166 megawatt-peak (MWp) solar farm paired with battery storage, which could significantly enhance both capacity and grid resilience once operational.
In March, construction began on the P7.5‑billion Daanbantayan Solar Power Plant, a 150‑MW facility, expected to supply clean energy to around 300,000 people once it begins operations in 2026.
A 30‑MW hybrid battery energy storage system is also underway in the Mactan Economic Zone to support grid reliability amid rising demand from businesses and industries in the area.
Keeping the lights on
As the Visayas faces growing electricity demand, securing reliable, resilient, and diversified power is now a top priority for the region’s economic and social future. The combination of rising business activity, ongoing disaster recovery, and a grid that still relies heavily on imports from Luzon and Mindanao makes the region particularly vulnerable to supply shortfalls. Stakeholders agree that a balanced energy mix is essential to ensure continuous power for industries, households, and public services.
Investments in transmission upgrades, new generation projects, and modern energy storage systems are critical to avoid recurring yellow alerts and price spikes that can disrupt businesses and deter investors. At the same time, expanding renewables and hybrid storage projects not only strengthens grid resilience but also supports long-term sustainability goals. For this region, reliable electricity is no longer optional — it is the foundation for its economic recovery and future prosperity.
Sources:
https://www.pna.gov.ph/articles/1262995
https://newsinfo.inquirer.net/2155758/visayas-power-supply-tight-in-26
https://ceedphilippines.com/wp-content/uploads/2024/05/Cant-Take-The-Heat-2024.pdf
https://visayandailystar.com/electricity-rates-higher-due-to-yellow-alerts/
https://business.inquirer.net/564689/why-reliable-energy-is-critical-for-cebus-growing-bpo-industry
https://businessmirror.com.ph/2026/01/02/mgen-aims-to-start-building-cebu-coal-power-plant-in-q1
https://powerphilippines.com/levanta-renewables-lands-166-mwp-solar-storage-project-in-visayas
https://business.inquirer.net/535716/aboitiz-power-building-30-mw-energy-storage-in-cebu