[Vantage Point] One peso, two fortunes: The hidden energy bill

Raphael Reyes/Rappler

The Philippines' underlying vulnerability is a structural imbalance between the dollars the country earns and those it spends

AT A GLANCE

• The depreciation of the peso creates a disparity in purchasing power between overseas Filipino workers and domestic wage earners, with the former benefiting from increased remittances while the latter face rising costs.
• The Philippines' heavy reliance on imported energy exacerbates the economic strain, leading to a projected $19.1 billion current-account deficit and significant capital flight, which further weakens the peso.
• To achieve a sustainable recovery, the country must reduce its dependence on imported energy and enhance its export earning capacity, as temporary gains for some may be offset by higher costs for others.

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When a household opens a higher electricity bill, it is also confronting a currency problem. The peso’s slide creates a stark divide across the country: extra cash for families receiving dollars, but steeper costs for those earning pesos. Yet even that apparent windfall carries an invisible tax. Because the Philippines relies heavily on imported energy, currency depreciation and global commodity swings compound, draining household budgets, raising operational overhead, and eroding the foreign exchange reserves the broader economy requires to keep operating. 

For Elena, a nurse in California, the peso’s decline looks like a modest salary increase. Sending $1,000 to her mother yielded P60,000 at a P60 exchange rate; at P64, it yields P64,000 before transfer fees. 

But for Ramon, a delivery driver paid strictly in pesos, that same currency movement brings costlier pump prices and fewer groceries. Neither has changed jobs, worked longer hours, or shifted productivity, yet their purchasing power moves in opposite directions. 

Their lived experiences capture the uneven consequences of currency depreciation. Overseas Filipino workers (OFWs) and their dependents appreciate the extra cash, while domestic wage earners absorb the pain of rising prices. 

Even Elena’s mother cannot treat the extra P4,000 as pure windfall. A good portion will simply cover goods and services made pricier by the weaker peso—starting with her power and grocery bills. 

On October 27, the peso closed at P64.17 per dollar, extending its slide despite an unexpectedly sharp 50-basis-point policy rate hike to 5.50% by the Bangko Sentral ng Pilipinas (BSP) the previous week.

The currency’s brief bounce quickly faded, exposing the limits of monetary defense when an economy must continually spend massive amounts of foreign exchange on basic necessities. 

The underlying vulnerability is a structural imbalance between the dollars the country earns and those it spends. The BSP projects a $19.1-billion current-account deficit this year, equivalent to 3.8% of gross domestic product. 

Capital flight compounds this strain: BSP figures for January through August show net foreign portfolio investments recording $4.254 billion in net outflows, reversing $4.583 billion in net inflows a year earlier. That nearly $8.84-billion adverse swing explains why dependable remittance receipts have failed to halt depreciation. (READ: Martin Romualdez’s properties: Where and how much?)

Energy sits squarely at the center of this dollar drain. Building a gas-fired power station on domestic soil does not transform imported fuel into a local resource. World Bank trade data show Philippine liquefied natural gas (LNG) import spending jumped 52.6%—from $767.73 million in 2024 to $1.171 billion in 2025. 

Over the same period, imported physical volumes rose 41.7% to roughly 1.68 million tons. Notably, roughly 79% of that $403.62-million increase came from buying more physical fuel, with higher unit values accounting for the rest. This demonstrates how expanding reliance swells the external bill long before an exceptional global price shock hits. 

In the broader trade account, Philippine Statistics Authority data reveal that imports of mineral fuels, lubricants, and related materials grew by $2.56 billion in the first half of 2026, accounting for 21% of total import growth and equivalent to 37% of the widening merchandise trade deficit. 

By comparison, August figures show fuel imports reached $1.85 billion, while electronics imports of $4.51 billion were more than offset by $6.20 billion in exports. Electronics generates net foreign exchange; imported fuels represent an unhedged dollar drain. 

At the generation level, the arithmetic is unforgiving. Consider an illustrative facility requiring seven million British thermal units of fuel to generate one megawatt-hour. At $10 per unit and an exchange rate of P58, fuel costs alone amount to P4.06 per kilowatt-hour.

If international fuel jumps to $30 and the exchange rate weakens to P63, that fuel component surges to P13.23 per kilowatt-hour before factoring in other generation costs. While actual tariff recovery depends on power contracts and regulatory treatment, consumers ultimately face a bill that incorporates both the global commodity spike and the currency depreciation that magnifies it. 

This dynamic ripples across corporate ledgers and family tables alike. Consider Miguel, who runs a business process outsourcing firm billed in dollars while paying salaries and rent in pesos. Depreciation widens his operating margin, provided clients do not demand price cuts and domestic overhead remains manageable. Freelancers with foreign clients share that advantage. (READ: [Vantage Point] Gig Economy: Growth engine or precarious lifeline?)

Across town, bakery owner Liza faces the painful reverse. Her walk-in customers pay in pesos, but imported flour, packaging, and commercial electric utility bills expose her directly to dollar costs. She must decide whether to raise bread prices and risk customer resistance, or absorb the cost hikes and watch her livelihood shrink. Airlines, import-heavy manufacturers, and firms servicing unhedged dollar debt confront identical pressures. Their resilience depends on pricing power, hedging strategies, and whether they generate dollar revenue. 

Gas power undeniably provides controllable electricity when other plants falter, and system outages carry severe economic costs. Clean alternatives like solar, wind, and battery storage demand substantial upfront capital, grid expansion, and adequate storage duration. 

Yet dependable supply must remain affordable under adverse economic conditions. Energy planners must disclose what proposed capacity actually costs when fuel prices spike and the peso tumbles, identifying who truly bears the foreign-exchange risk. 

A lasting recovery demands firmer foundations: stable foreign investment, greater export earning power, and genuine relief from expensive imported energy. Elena may welcome the extra pesos, and Miguel may enjoy healthier margins. But Ramon and Liza have good reason to worry. 

The decisive policy test is whether the country can break its avoidable dependence on imported energy before the temporary gains enjoyed by some are completely swallowed by the higher bills imposed on everyone else. – Rappler.com