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Preparations for President Ferdinand R. Marcos Jr.’s fifth State of the Nation Address (SONA) have officially begun, with the House of Representatives leading an initial inter-agency coordination meeting ahead of the July 27 event.
Representatives from the Senate, Office of the President, security forces, local government units, and other key agencies took part in discussions focused on logistics, security arrangements, protocol, and overall operations for the annual address before Congress.
While the official agenda for the State of the Nation Address (SONA) remains under wraps, recent developments in the global and domestic energy sectors underscore the urgent need to strengthen the country’s power distribution system.
Across much of the Philippines, electric cooperatives (ECs) serve as the backbone of electricity distribution, making their performance critical to economic growth, public services, and the daily lives of millions of Filipinos. Yet many continue to struggle with aging infrastructure, operational inefficiencies, and governance challenges that hinder reliable power delivery.
As President Ferdinand Marcos Jr. enters the final stretch of his term, reforming and modernising electric cooperatives should be a defining priority of his energy agenda. His SONA later this month presents an opportunity to make that commitment clear.
Here are four reasons EC reform deserves a prominent place in the administration’s remaining priorities.
1. Infrastructure upgrades have lagged, resulting in power woes.
The Institute of Contemporary Economics (ICE) said ongoing improvements in Iloilo’s power distribution system may have helped cushion the impact of strain on the Visayas grid, while other parts of the sector continue to lag.
It noted recurring grid alerts since May that contributed to outages in Iloilo City within Primelectric Holdings’ franchise area, including several interruptions in June. The group added the situation underscores the need to move beyond routine maintenance and accelerate full-scale modernization across the industry.
“Maintenance keeps an existing network operating. Modernization builds capacity, redundancy, automation, monitoring capability, faster restoration, and resilience,” highlighted the report.
While Primelectric, a private distribution utility, continues to carry out its operational responsibilities, an earlier study by the ICE highlighted significant gaps in capital spending among seven ECs in the Panay and Guimaras regions. Of the ₱10.52 billion programmed for capital expenditures from 2022 to 2024, only about ₱2.38 billion was actually disbursed, indicating substantial underinvestment in critical power infrastructure.
The report revealed that most of the limited funds were allocated to routine maintenance rather than modernization and expansion. This has delayed upgrades to substations, distribution lines, and protection systems, raising concerns over long-term grid reliability and resilience.
(Also read: Cebu Faces Growing Energy Crisis, Consumer Group Urges Emergency Declaration)
2. Slow recovery of power services following natural disasters has intensified their overall impact on communities.
EC performance plays a crucial role in shaping disaster recovery outcomes. In northern Cebu, a magnitude 6.9 earthquake struck in September 2025, killing 79 people, injuring over a thousand, and causing around ₱3 billion in damage. The situation worsened in the following weeks as Typhoon Tino brought flooding, followed by Typhoon Uwan, further straining already affected communities.
The Cebu Electricity Rights Advocates (CERA) warned that these back-to-back disasters exposed long-standing weaknesses in the province’s power system. While the privately-owned Visayan Electric was noted for relatively faster restoration and clearer communication in urban areas, communities served by the Cebu Electric Cooperatives (CEBECOs) experienced slower recovery, with prolonged service interruptions affecting basic needs, including water supply.
CERA stressed the need for more equitable resource allocation, stronger resilience planning, and improved coordination between electricity and water systems to avoid cascading service failures during emergencies.
According to a study by the Philippine Institute for Development Studies (PIDS), mega-large ECs in Visayas and Mindanao generally performed better in power restoration than smaller ones, although extra-large utilities, likely private distributors, sometimes outperformed them.
Restoration took the longest after major storms, while scheduled maintenance also caused extended outages. The monthly customer average interruption duration index shows an upward trend, indicating that power restoration has been taking longer over time among ECs.
3. Off-grid areas need stronger economic growth, but poor electricity planning and lack of funds continue to hold them back.
The Energy Regulatory Commission (ERC) approved a P30.773 billion missionary electrification subsidy for the 2026 program, funded through the Universal Charge for Missionary Electrification (UCME) paid by grid-connected electricity consumers.
The UCME subsidizes electricity in off-grid areas, where power generation depends largely on diesel. Through its Small Power Utilities Group (SPUG) and independent power providers, NPC supplies electricity to 281 power plants serving 125 islands and isolated communities.
The Department of Energy (DOE) admitted that power generation in Small Island and Isolated Grids (SIIGs) remains costly because many facilities rely on ageing generator sets. NPC data showed that about 77% of its operating units were over five years old, reducing efficiency and increasing fuel consumption. Generation costs are further driven up by the difficulty of transporting fuel to remote islands and upland communities, where bad weather and security concerns can disrupt deliveries.
To ease the heavy reliance of NPC-SPUG on public subsidies, the DOE is encouraging wider private sector involvement while also pushing reforms in ECs to improve long-term viability.
A key mechanism for this shift is the Qualified Third Party (QTP) Program, which opens off-grid service areas to private companies. Under updated guidelines, the National Electrification Administration (NEA) is assigned to lead outreach and information efforts, helping ECs engage private providers within their franchise areas.
(Also read: Europe’s Record Heatwave Tests Renewables to the Limit)
4. Island tourism is booming, but inadequate access to stable and affordable power is slowing its momentum.
According to the World Travel and Tourism Council, tourism generated about ₱5.9 trillion for the Philippine economy in 2025, accounting for roughly 21% of GDP and sustaining around 11.7 million jobs nationwide.
However, many key destinations are still powered by EC rather than large utilities, with several facing long-standing concerns over service interruptions, outdated systems, high technical losses, and governance issues.
For instance, in May 2025, Siquijor suffered worsening power disruptions as all six generating units of Siquijor Island Power Corporation (SIPCOR), the island’s sole supplier, began failing, causing daily rotating brownouts of two to five hours. The province declared a state of calamity due to economic losses in tourism. Subsequent hearings found SIPCOR operating without required permits, while the Province of Siquijor Electric Cooperative (PROSIELCO) was cited for equipment and infrastructure delays.
Meanwhile, Malapascua Island in northern Cebu is a globally known dive destination, especially Monad Shoal, famous for thresher shark sightings and steady tourist arrivals. Despite its popularity, it remains dependent on limited island-based generation under CEBECO II, leaving supply vulnerable. Reports and local accounts have long cited frequent outages affecting tourism and daily life. In April 2026, advisories again warned of ongoing interruptions due to generator constraints and maintenance limits on the small power system.
In Davao, Samal Island’s growth as a tourism and investment destination was constrained by unreliable electricity under the Northern Davao Electric Cooperative (NORDECO), with frequent outages disrupting businesses and daily life. Local estimates placed annual economic losses at ₱120–₱150 million since the 2010s, as investors repeatedly raised concerns over power stability. A proposed ₱1.1 billion submarine cable to Pantukan was never completed by the EC.
A major shift came in 2026 when Davao Light assumed control under Republic Act No. 12144, later inaugurating a 1.25-km, 69-kV submarine interconnection capable of delivering up to 50 megawatts (MW), marking a key step toward a more stable supply.
Making ECs a Priority
Declaring EC reform as a priority in the SONA would be an important first step, but words alone will not be enough. The administration must back that commitment with sustained attention, decisive policy action, and coordinated government efforts to deliver the long-overdue improvements the sector needs.
If the goal of national development is to be realized, EC reform must move beyond technical discussion and into the center of policy priorities. Stronger accountability, improved governance, and accelerated modernization are essential to ensure that public-funded utilities deliver dependable service and support inclusive growth across the country.
With time remaining in his term, President Marcos Jr. has an opportunity to leave a lasting legacy by ensuring that meaningful reforms translate into more reliable and resilient power services for Filipinos.
As DOE Secretary Sharon Garin declared at the 2026 Energy Forum of the Economic Journalists Association of the Philippines (EJAP), “Energy security is inseparable from national security.”
Sources:
https://business.inquirer.net/597427/visayas-power-woes-highlight-need-for-gridwide-upgrade
https://en.wikipedia.org/wiki/2025_Cebu_earthquake
https://www.sunstar.com.ph/cebu/signal-no-1-raised-over-cebu-other-parts-of-the-country-due-to-uwan
https://pidswebs.pids.gov.ph/CDN/document/pidsdps2248.pdf
https://www.philstar.com/business/2026/05/29/2531203/missionary-electrification
https://legacy.doe.gov.ph/sites/default/files/pdf/electric_power/medp_2016-2020.pdf
https://www.philstar.com/business/2025/06/14/2450329/tourism-seen-contributing-p59-trillion-2025-gdp
https://powerphilippines.com/sipcor-faces-erc-action-for-siquijor-blackouts/
https://www.sunstar.com.ph/cebu/cebeco-ii-soon-to-power-malapascua
https://www.facebook.com/groups/1167444178034829/posts/1709414613837780
https://www.sunstar.com.ph/davao/mayor-samal-loses-p120-p150m-yearly-due-to-unresolved-power-woes
https://www.sunstar.com.ph/davao/supreme-court-upholds-davao-light-expansion
https://www.sunstar.com.ph/davao/davao-samal-submarine-cable-launched-to-stabilize-power
https://www.facebook.com/media/set/?vanity=ejap.pilipinas&set=a.1297606742543353
DOE Sec. Sharon Garin, keynote address at the Economic Journalists Association of the Philippines (EJAP) Energy Forum 2026, Manila, Philippines, May 26, 2026.