The country’s total peak demand1 in 2019 was recorded at 15,581 MW, which is 799 MW or 5.4% higher than the 14,782 MW in 2018. As recorded by the System Operator, the Luzon grid contributed 11,344 MW or 72.8% of the total demand while Visayas and Mindanao contributed a share of 14.3% (2,224 MW) and 12.9% (2,013 MW), respectively. With reference to year 2018, the peak demand of Luzon increased by 468 MW or 4.3% while Visayas and Mindanao grew by 8.3% and 8.6%, respectively.
The Philippines’ Gross Domestic Product (GDP) posted a 5.9% full-year growth for 2019, 0.3% below the previous year’s GDP, the slowest growth rate in eight years. In the 4th quarter of 2019, the GDP grew by 6.4%, but it was still not enough to meet the target economic growth which ranges from 6.0% to 6.5%. Nonetheless, historical data has shown that when the Philippines experienced an expanding economy or a positive GDP growth rate, that expansion was directly proportional to electricity consumption. Therefore, correlating the relationship between the two, a continuous GDP growth entailed a consistently rising demand in electricity.
The total electricity sales and consumption grew by 6.3%, with an absolute level of 106,041 GWh by the end of 2019 from 99,765 GWh of the previous year. As the rate of inflation slowed down to an average of 2.5% in 2019 from a noticeably higher rate of 5.2% in 2018, the country as expected experienced a boost in electricity consumption. The sector with the largest consumption remains to be residential (28.8%) followed by industrial (26.6%) and commercial (24.0%).
The industrial sector is the only sector whose annual growth rate took a downswing from its rapid increase of 7.9% in 2018 down to only 2.2% in 2019. One factor of the decline can be attributed to the slowdown in public construction at the start of 2019 as a result of the delayed approval of the Administration’s 2019 budget and the 45-day public works ban due to the 2019 National and Local Elections on 13 May 2019. Likewise, the reduction in public infrastructure spending, hence lagging in construction-related manufactures, and the weaker global economy resulted in a decrease in both volume and value of the manufacturing sector, only improving in the latter part of the year bolstered by the surge in public spending of 54% or ₱100.3 billion in September as state agencies expedited the implementation of major infrastructure projects as part of their catch-up measures. As a result, electricity sales and consumption of the industrial sector went up by 3.8% for the second half of the year.
On the other hand, the growth rate of the residential and commercial sectors remained persistent as the consumption increased by 8.1% and 6.1%, respectively, against last year’s growth rate of 5.5% for both sectors due to election-related activities and warmer temperature in the summer months. The continuous rise in global surface temperatures primarily contributed to the uptrend as heat indices hit dangerous levels especially in the months of April, May, and June. Moreover, the El Niño event throughout the year is a likely driver of the variation in consumption especially in households and commercial spaces e.g. an increase in consumption can be attributed to substantial utilization of cooling equipment.
“Others”, referring to public buildings, street lights, irrigation, agriculture, and “others not elsewhere classified”, continued to post a modest growth rate of 5.2% from 2,753 GWh in 2018 to 2,897 GWh in 2019.
Parallel to the Others sector, the utilities’ own-use for office and station use of the power plants, classified in Fig. 2 simply as “Own-Use”, grew significantly by 9.7% or 8,929 GWh from a previous diminution of 2.1% between 2018 and 2017. While this year, “Losses” from the generation, transmission, and distribution accounted for 9,994 GWh, the largest growth by sector with a 988 GWh or 11.0% increase from 2018 due to the testing and commissioning of various power plants in the country with total capacities of 2,002 MW (Luzon - 1,035 MW, Visayas - 371 MW and Mindanao - 596 MW).
1 Total non-coincidental peak demand of Luzon, Visayas and Mindanao grids
Click to view/download PDF file of 2019 Power Situation Report