Electricity rates are likely to increase further as the Philippine peso’s continued decline against the US dollar drives up the cost of imported fuel used for power generation, according to Department of Energy (DOE) Secretary Sharon Garin.
While transmission and distribution utilities have regulated rates, generation charges—the largest portion of a household power bill—are largely tied to foreign exchange movements, global fuel prices, and market supply.
Key power sources, including coal, diesel, and liquefied natural gas (LNG), are purchased internationally in dollars.
“Indirectly it will affect [rates] because it will affect coal, diesel, and LNG in dollar terms,” Garin said in a media interview.
“It will impact the rate of electricity because it passes through, so it will impact the cost per kilowatt hour,” she continued.
The Philippine peso closed at a record-low of P64.17 against the U.S. dollar on Tuesday, Oct. 27, marking its 33rd historic low of the year.
To soften the impact on consumers, the DOE is seeking discussions with the Energy Regulatory Commission (ERC) to explore regulatory mechanisms that could buffer or delay pass-through costs.
“I need to see ERC Chair Nino Juan and we’ll check if there is any way we can delay or lessen the impact,” said Garin .
The DOE chief stressed that the government is actively preparing for overlapping economic and seasonal strains, including currency volatility, global oil market pressures, and the looming environmental impacts of El Niño.
Should climate impacts worsen the energy and economic outlook, Garin said that a whole-of-government response may be triggered to mobilize state support across agencies like the Department of Environment and Natural Resources (DENR), Department of Agriculture (DA), and Department of Transportation (DOTr).
“If the impact is really big, then we can report that to the Cabinet, and maybe subsidies can be given,” Garin said, though clarifying that no official request for subsidies has been submitted yet.IMT
