Marcos Jr. Highlights Key Energy Policy Areas in SONA 2026

In his 2026 State of the Nation Address (SONA), Philippine President Ferdinand Marcos Jr. outlined key energy policy initiatives aimed at reducing electricity costs for consumers and ensuring supply stability. A central proposal is the removal of system loss (SL) charges, which are currently passed on to consumers. The President criticized the practice of adding SL charges, along with value-added tax (VAT), to consumer bills and called for immediate amendments to the Electric Power Industry Reform Act (EPIRA). However, experts note that SL comprises both technical losses inherent in electricity transmission due to physics and non-technical losses from theft and illegal connections. Technical losses are unavoidable, and eliminating SL charges could lead to increased taxpayer subsidies, bankruptcies among distribution utilities, or hinder infrastructure improvements. A potential compromise suggested is to consolidate SL charges into the generation charge. Regarding power generation capacity, the President announced plans to add up to 10,000 megawatts (MW) through over 200 renewable energy projects. The Philippines' electricity generation is lower than that of neighboring countries, and while solar power adoption is increasing, the price disparity between daytime and nighttime electricity remains a challenge. The importance of large-scale solar projects combined with battery storage is highlighted. Furthermore, the development of indigenous oil and gas resources will be promoted through the expansion of the Malampaya service contract and new petroleum exploration contracts. Nuclear energy is also being revisited as a crucial component to meet the growing power demands of data centers, offering high capital expenditure but low operational expenditure. Notably absent from the SONA was any mention of coal power, despite it currently accounting for nearly 60 percent of the country's total power generation. Analysts suggest that to effectively lower electricity prices, expanding thermal power sources like coal and gas, privatizing and rehabilitating existing hydro plants for efficiency, and developing localized power sources (coal, gas, or small nuclear plants) for off-grid areas could be more viable options than eliminating SL charges. Information Source: Philstar Business