Gatchalian Seeks Gradual Rate Hikes As Oil Crisis Escalates
- March 20, 2026
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The Energy Regulatory Commission (ERC) is being pressed to strictly enforce staggered electricity rate increases as global oil supply disruptions linked to tensions in the Middle East threaten to drive up power costs in the Philippines.
Senator Sherwin Gatchalian, vice chair of the Senate Committee on Energy, warned regulators against allowing “one-time, big-time” adjustments that could worsen the financial strain on households already coping with rising fuel prices.
“The electricity sector is a regulated industry, and the ERC should not allow one-time, big-time increases in electricity rates. Now is the worst time to increase electricity costs,” Gatchalian said.
The lawmaker emphasized that any upward adjustments must be spread across several billing cycles to cushion the impact on consumers, particularly as the country braces for higher demand during the summer months.
Disruption In Global Oil Supply
The anticipated surge in electricity rates is being linked to ongoing geopolitical tensions involving the United States, Israel, and Iran, which have disrupted global oil supply chains. The Philippines, which sources nearly all of its oil imports from the Middle East, is particularly vulnerable to these shocks.
ERC Chairperson Francis Saturnino Juan earlier indicated that electricity prices could increase by as much as P4 per kilowatt-hour in April as the full impact of the crisis feeds into generation and transmission costs.
Power distributor Manila Electric Co. (Meralco) has already implemented an increase of ₱0.6427 per kWh for March, pushing the overall rate for a typical household to ₱13.8161 per kWh from ₱13.1734 per kWh in February. For households consuming 200 kWh, this translates to an additional ₱129 in monthly electricity bills.
The ERC has warned that consumers are likely to feel the full effect of higher energy costs in April and May, when electricity demand peaks during the hot, dry season.
Call for Regulatory Vigilance
Gatchalian urged the ERC to exercise tighter oversight to ensure that increases remain reasonable and justified, stressing the need to prevent unwarranted rate adjustments.
“It’s the job of the ERC to help ease the burden on our people,” he said, reiterating the regulator’s role in safeguarding consumer welfare in a volatile energy market.
While the Electric Power Industry Reform Act of 2001 limits direct government intervention in electricity pricing, the senator noted that authorities may step in during periods of supply shortage.
Inflation Risks
Beyond electricity costs, the broader economic impact of the oil crisis is also raising concerns. Government economic managers have warned that inflation could accelerate sharply if global oil prices continue to rise.
Projections indicate inflation could climb to between 4.5 percent and 5.1 percent if Dubai crude reaches $100 per barrel, and as high as 6.3 percent to 7.5 percent if prices hit $140 per barrel.
To mitigate these pressures, proposals have been filed in Congress to suspend excise taxes and value-added tax on petroleum products. While such measures could reduce inflation, they may also result in significant revenue losses estimated at ₱136 billion for the government.
Still, economic planners say the tax relief could help temper inflation, potentially keeping it within a lower range compared to worst-case scenarios.
Consumer Protection
As energy costs rise globally, Philippine regulators face the challenge of balancing cost recovery for utilities with consumer protection. Gatchalian’s call underscores growing concern that without careful oversight, sudden price adjustments could deepen the financial burden on households.
With higher electricity rates looming, the coming months are expected to test both regulatory responsiveness and consumers’ resilience as they navigate an increasingly volatile energy landscape.
Source:
https://tribune.net.ph/2026/03/13/erc-urged-gradual-power-hikes-needed-to-avoid-price-shock
https://www.gmanetwork.com/news/topstories/nation/979876/gatchalian-erc-electricity-rate/story
