SPECIAL FEATURE
CEBU CITY, Philippines – With the beach just minutes from the airport, Lapu-Lapu City on Mactan Island—site of the historic clash between chieftain Lapulapu and Portuguese explorer Ferdinand Magellan—has earned its title as the “Historic Resort City.”
Thousands visit this highly urbanized coastal destination each week, making it a hotspot for global hotel brands and luxury resorts like Filinvest’s Crimson Resort and Spa Mactan.
Three years after the COVID-19 pandemic devastated the global travel industry, tourism in Lapu-Lapu City is roaring back. From 2022 to 2023 alone, the city saw a remarkable 43.6% jump in tourism, according to data from the Philippine Statistics Authority-Central Visayas (PSA-7).
Just as Cebu’s tourism sector begins to recover its momentum, a long-standing issue resurfaces—power instability, once again threatening to hinder its growth.
Despite thriving commercial activity and infrastructure expansion, Cebu remains heavily dependent on imported electricity. This growing reliance, particularly on power supply through transmission lines from Luzon and Mindanao, is raising red flags among energy advocates and tourism leaders.
As Cebu’s tourism and hospitality sectors expand, their energy demands rise in tandem—a reality that has placed the island’s limited local power generation capacity under increasing pressure.
Researchers from non-profit group ILAW Foundation are calling on leaders and businesses in Cebu to invest in reliable, in-island power sources. Without this, they warn, the province risks undermining one of its bread-and-butter industries—tourism.
In 2023, Cebu welcomed over 5.1 million visitors—a 28% increase from the previous year, official data from the Department of Tourism (DOT) showed. Though the island has yet to match its 2019 peak of 6.6 million arrivals, the momentum is clearly back.
A bird’s eye view of the seas surrounding Mactan Island | Stock Photo
Central Visayas, where Cebu is the biggest economic player, posted the fastest economic growth rate at 7.3% in 2023 and ranked as the top contributor outside Luzon, with a 6.6% share of national growth, according to the PSA.
Given these promising developments, it’s easy to see why Cebu continues to be a top choice for investors.
According to Leechiu Property Consultants’ Philippine Accommodation Pipeline 2024 report, the Visayas is expected to account for 42% of new hotel rooms opening nationwide by 2025—an estimated 17,000 room keys.
Cebu alone will deliver at least 6,715 of those, with Lapu-Lapu City leading the pack in both volume and pace of developments.
In fact, the ‘historic resort city’ ranked as the top destination in the country for major accommodation developments, with 10 upcoming projects totaling 4,786 rooms. Another 2,000 rooms are also in the pipeline within Cebu City.
Mia Singson-Leon, president of the Hotel, Resort and Restaurant Association of Cebu Inc. (HRRACI), said the industry is optimistic.
HRRACI is one of the biggest tourism groups in Cebu, with around 800 members ranging from small resorts in Oslob to major brands like Crimson.
Consultants from Leechiu Property Consultants attributed the surge in high-end developments across the Visayas to its strong international connectivity—especially in key hubs like Cebu, which continues to attract global investors and luxury brands.
Developers are now targeting Cebu for Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism. While the island lacks a large-scale venue for thousands of guests, two such facilities—one in Mactan and another in South Road Properties (SRP)—are already under construction.
MICE tourism powerhouses like Singapore and Dubai are known for their world-class infrastructure, resources, and services tailored for large-scale events—qualities that Cebu is now actively developing as it positions itself as a premier MICE destination in the Philippines.
Singson-Leon acknowledged that much is at stake for Cebu’s tourism industry, especially as it ramps up efforts to sustain its growth and attract more global attention.
“And we’re doing our best to ensure this growth stays,” she said.
Cebu’s rapid development is outpacing its ability to supply power from within the island. While Cebu’s current electricity demand is being met through a mix of local and imported supply, this growing dependence on inter-island transmission makes the region vulnerable to disruptions.
According to the National Grid Corporation of the Philippines, Cebu’s total plant capacity today is 1,123 megawatts against a peak demand of 1,223 that was recorded in May 2024.
That 100 MW shortfall is bridged through inter-island transmission lines that import electricity from Luzon and Mindanao.
This means Cebu, and the Visayas in general, relies on power from other islands—and not just occasionally. As of the latest figures, Cebu imports about 60% of its total electricity requirements from outside sources.
While these interconnections allow Cebu to avoid full-blown blackouts, they are far from ideal. According to ILAW Foundation, a non-profit organization advocating for affordable and accessible electricity, that such dependence makes the province vulnerable to transmission failures, rising electricity prices, and national grid strain.
ILAW recently held a focus group discussion to assess how power instability affects major tourist destinations in the Philippines—Cebu among them. Other destinations included in the study were Siargao, Palawan, and Samal Island in Davao.
The study found that, compared to Siargao, Palawan, and Samal Island, Cebu currently has a more sufficient power supply to support its tourism industry—at least for now.
However, ILAW emphasized that this stability may be short-lived without urgent modernization of Cebu’s power infrastructure. The group called for the development of additional base load power sources to prevent instability that could lead to billions of pesos in economic losses.
One major concern is Cebu’s heavy reliance on imported electricity from other provinces. Despite being the region’s hub for commerce, trade, and tourism, Cebu does not generate enough power locally to meet its own needs.
Within the Visayas grid, Cebu has the highest power demand—accounting for roughly 45 percent—outpacing other major islands such as Panay, Negros, and Leyte-Samar.
Yet Cebu still imports around 60 percent of its power supply from neighboring areas—including Luzon and Mindanao—raising concerns about whether these external sources can keep pace with the island’s rapidly growing energy demands, especially those driven by tourism.
It’s also important to note that cities in Luzon and Mindanao are expanding as well—along with their own increasing demand for electricity.
“Continued power instability threatens business sustainability, job security, and the long-term growth of the tourism sector. If this persists, businesses will have no choice but to shut down, leaving many without jobs,” Beng Garcia, ILAW national convenor, said.
As of 2023, power plants in Cebu could generate over 7.2 million megawatt-hours (MWh) a year, according to the DOE.
The DOE projects an additional 6,841 megawatts (MW) of power capacity to go online in 2025. Of this, Luzon will receive the lion’s share at 5,754 MW, followed by 855 MW for the Visayas and 232 MW for Mindanao.
Time is critical, as projections from the Philippine Energy Plan estimate that peak power demand in the Visayas alone will surge to 10,678 MW by 2050.
As of May 2024, the Visayas hosts about 76 power plants with a combined capacity of 3,334 MW—nearly half of which comes from renewable sources. More energy projects are in the pipeline. For instance, AboitizPower’s expansion of its 340-MW Therma Visayas Inc. (TVI) coal plant in Toledo, Cebu, which will add 150 MW to help ensure a stable power supply.
The wave of new power projects and efforts to diversify the energy mix point to a bright future for Cebu and Central Visayas. But keeping this progress on track will demand firm action and ongoing collaboration between the government, energy providers, and key industries to create a more reliable and resilient energy system.
Singson-Leon echoed ILAW’s findings, emphasizing the need for “organic power plants” in Cebu to ensure a stable power supply as the tourism sector continues to grow.
“With the projected increase, so now, we know it is not sustainable. The capacity will not be enough to meet the growth that we are protecting,” she explained.
If Cebu were to activate more power plants, tourism stakeholders hope this would not only stabilize the power supply but also lower electricity costs, ultimately reducing their operational expenses.
Engineer Jake Good, assistant chief engineer at Crimson Resort and Spa Mactan, said their five-star resort pays up to P4.8 million a month in electricity bills.
That’s nearly four times the average monthly power bill of P1.1 million for other large businesses in the area.
“With the projected increase, so now we know it is not sustainable. The capacity will not be enough to meet the growth that we are protecting,” she explained.
If Cebu were to activate more power plants, tourism stakeholders hope this would not only stabilize the power supply but also lower electricity costs, ultimately reducing their operational expenses.
Engineer Jake Good, assistant chief engineer at Crimson Resort and Spa Mactan, said their five-star resort pays up to P4.8 million a month in electricity bills.
That’s nearly four times the average monthly power bill of P1.1 million for other large businesses in the area.
For households in Mactan, Mactan Electric Company (MECO) charges a generation rate of P9.65 per kilowatt hour as of March 2025.
Good explained that electricity usage spikes with higher occupancy rates.
“The past few weeks we’ve experienced power interruptions and power fluctuations. We’re expecting to experience this consistently throughout summer as demand for electricity increases,” Good said.
Fortunately, Crimson has diesel generators as backup and is exploring solar options for resilience, especially after the painful lessons of Typhoon Odette (Rai) in 2021.
The five-star resort is also bracing for power interruptions, especially with the onset of the dry and hot season, commonly referred to as ‘summer.’ In the past three weeks alone, Crimson has already experienced unplanned outages and several power surges, according to Good.
Like Singson-Leon, Good expressed hope that Cebu would eventually enjoy a more reliable power supply and lower electricity costs. He believes that investing in nuclear energy can be a viable long-term solution to address both concerns.
“The hotel and the business industry is really hopeful that both the local government and our power companies are doing their best to really augment the region’s capacity. Therefore, they will be able to provide higher capacity and affordable power to all of us,” said Singson-Leon.
Power instability doesn’t just affect lights and air conditioners—it threatens the sustainability of Cebu’s most profitable industry. HRRACI’s Singson-Leon emphasized that Cebu needs “organic,” in-island power plants to ensure reliable supply and support continued growth.
“With the projected tourism increase, we know the current capacity won’t be enough. We need long-term energy investments to secure the future of this industry,” she said.
Power instability impacts not only operations but also jobs. If outages persist or energy prices continue to climb, tourism operators—especially smaller businesses—may be forced to downsize or shut down.
ILAW estimates that poor power infrastructure could lead to billions in foregone economic opportunities, particularly in tourism-heavy regions like Cebu.
Need for energy security
With Cebu’s tourism industry on the rise, ensuring a stable and affordable power supply is no longer an option—it is a necessity.
While the national government’s grid interconnections offer a buffer against immediate blackouts, experts agree that long-term solutions must focus on strengthening local power generation in Cebu and the Visayas. This means investing in sustainable base-load power—be it from cleaner fossil fuel plants, renewables, or even nuclear.
As Cebu’s reputation as a world-class travel destination continues to rise, the need for stable and cost-efficient power becomes ever more critical—not just for businesses, but for the thousands of lives tied to the island’s hospitality and tourism economy. /clorenciana