The peso at 59: what a weak currency does to an energy project

On 17 October 2022 the peso closed at 59 to the dollar, its weakest level on record. It had opened the year at 51. The central bank had raised the policy rate at every meeting since May, including a 75 basis point move between meetings in July, and would take it to 5.50% by December. None of it stopped the slide until the dollar itself turned.

Compiled in September 2026 from the releases of the time, with the revisions the agencies have published since. Nothing here is a forecast.

Why it moved

The dollar rose against everything in 2022 as United States rates climbed, and the Philippines imports its fuel: crude, coal and LNG are all dollar purchases, and the current account went into deficit as their prices rose. A currency that pays for imported energy in dollars weakens when energy is expensive, which is the same quarter the energy is needed.

The three dollar lines in a plant

Fuel. Imported coal and refined products are priced in dollars and invoiced in pesos at the day's rate. A 15% fall in the peso is a 15% rise in the fuel bill before the commodity moves at all.

Equipment. Boilers, turbines, engines and controls are imported. A project priced in the spring of 2022 cost a sixth more in pesos by October.

Debt. A dollar loan on a peso-earning plant carries the same exposure in the other direction.

What is in pesos

A residue bought from a mill or a farm is priced in pesos, as is the labour to handle it and the disposal fee it replaces. A plant whose fuel is local has a peso cost base against a peso revenue. That does not make the equipment cheaper, but it means the operating case does not move with the currency, and in 2022 that was the difference between a study that still worked in October and one that did not.

We work with developers and technology providers on the Philippine execution side: permits, grid, fuel and construction. Tell us about the project. The figures behind each quarter are in the quarterly market brief.