DOE seeks solutions as weaker peso may hike electricity rates
SINGAPORE—Filipinos should brace for higher electricity prices as the peso continues to lose ground against the US dollar, Energy Secretary Sharon Garin said on Tuesday.
According to her, the weaker Philippine peso will drive up the import costs of coal, diesel and liquefied natural gas.
“So P64 is probably the highest we have now. So it will impact the rate of electricity because it passes through, so it will impact per kilowatt-hour,” Garin told reporters on the sidelines of Singapore International Energy Week.
The Department of Energy (DOE) chief said she would meet with Energy Regulatory Commission (ERC) Chair and CEO Francis Saturnino Juan to discuss possible measures to cushion and delay the impact of the peso’s depreciation.
The local currency plunged past the 64-per-dollar level for the first time on Tuesday. Data from the Bankers Association of the Philippines showed that the peso hit an intraday low of P64 against the greenback.
This came even as the Bangko Sentral ng Pilipinas moved to hike rates, in an attempt to curb rising inflation.
Garin said that this was “not the best time to be secretary” as the world faces an oil crisis that is affecting domestic pump prices.
As a solution, Garin said the DOE may again ask local fuel retailers to implement a staggered increase in oil prices.
“Normally, they follow, but hopefully it won’t be necessary anymore,” she added.
On top of this, the country is also facing a super El Niño, an extreme hot and drier condition that Garin earlier warned could trigger a spike in electricity demand, possibly resulting in higher power rates and more outages.
“You know, we try to work out as much as possible, minimize the impact,” Garin said.
“If the impact is really big, then we can report that to the committee, to the Cabinet and then maybe …, subsidies can be given,” she told reporters.
El Niño factor
The Philippine Atmospheric, Geophysical and Astronomical Services Administration said it expects El Niño to peak toward the end of the year. The Department of Science and Technology also warned that the country may experience drought by March 2027.
Even with a weaker peso, Manila Electric Co. (Meralco) customers will already see their bills going up this month after the power distributor announced a rate increase, citing higher power generation costs.
Meralco said that its October rate would be higher by P0.3191 per kilowatt-hour (kWh), bringing it to P15.0615 per kWh, compared with P14.7424 per kWh in September.
For the average household consuming 200 kWh, this will mean an additional P64 in its electricity bill.
On top of this, the ERC also approved a higher average distribution rate of P1.48 per kWh for Meralco, which is 9.6 percent higher than its current rate of P1.35 per kWh.
The rate increase, the first adjustment after 15 years, will take effect next month. The approved figure, however, was still lower than the P2.34 per kWh Meralco had applied for.
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