The Philippine Competition Commission (PCC) has given its conditional approval for the transfer of three significant hydroelectric power facilities to a subsidiary of the Aboitiz Group. The regulatory body's clearance, issued on November 28, 2025, is contingent upon strict commitments designed to maintain fair competition and protect consumers from potential price hikes in the Luzon electricity market.
Details of the Approved Transaction
In its decision, the PCC approved the proposed sale by the Power Sector Assets and Liabilities Management (Psalm) Corp. The assets involved are the Caliraya Hydroelectric Power Plant, the Botocan Hydroelectric Power Plant, and the Kalayaan Pumped Storage Power Plant. The buyer is Cleanergy 9 Power Inc., a unit under the Aboitiz conglomerate.
This complex of power plants is officially recognized by the Department of Energy as an Energy Project of National Significance. The PCC conducted a Phase 1 review of the deal, which raised immediate red flags regarding market power concentration.
Addressing Competition Risks with Binding Commitments
The commission identified a critical concern: the transaction could grant the Aboitiz Group both the capability and the motivation to unilaterally increase prices or limit reserve capacity. This risk is particularly acute during a transition period, estimated to last until the second quarter of 2027 or until a new Energy Regulatory Commission (ERC) tariff for the Kalayaan facility is implemented.
To mitigate these risks, Aboitiz submitted a set of voluntary commitments, which the PCC has accepted and made binding. The key pledges include:
- Filing a complete tariff application for the Kalayaan Pumped Storage Power Plant with the ERC within strict deadlines.
- Seeking provisional authority for interim rates to take effect while the full tariff review is ongoing.
- Adhering to specific rules on pricing behavior and capacity allocation for offers in the reserve segment of the Wholesale Electricity Spot Market for the Luzon grid.
To ensure these promises are kept, Aboitiz must appoint a senior competition compliance officer within 15 business days of the PCC's approval. This officer will be responsible for monitoring adherence, managing reporting duties, and acting as the main point of contact with the commission.
Protecting Consumers and Market Integrity
PCC Chairperson Michael Aguinaldo emphasized that the binding safeguards are crucial for consumer protection. "By securing targeted commitments in the Luzon ancillary services market during this transition, PCC is protecting consumers from undue price risks while ensuring reliability and fair competition," Aguinaldo stated.
The commitments are effective immediately and will remain in force until Cleanergy 9 implements an ERC-approved tariff for the Kalayaan plant. The undertaking includes provisions for penalties, a defined cure period for breaches, and anti-circumvention measures, all in accordance with the Philippine Competition Act.
The PCC's mandate is to review mergers and acquisitions to prevent any substantial lessening of competition. Its assessment focuses on potential impacts on pricing, supply, innovation, and consumer choice to uphold consumer welfare and promote equitable market conditions.
