Philippine energy market, first quarter 2026

The first quarter of 2026 split in two. Until March it continued 2025: growth slowing to 2.8%, inflation near the bottom of the band, spot power under 3 pesos in Luzon. Then shipments through the Strait of Hormuz were disrupted, Brent crossed 100 dollars, and headline inflation nearly doubled in a month. In between, the Department of Energy rewrote the auction programme for the next ten years.

This edition of our quarterly market brief covers January to March 2026. Compiled in September 2026 from the releases of the time, with the revisions the agencies have published since. Nothing here is a forecast.

Growth slowed for a fifth consecutive quarter

Real GDP grew 2.8% year on year. Gross capital formation fell 3.3%, reversing 4.5% growth a year earlier. Construction fell 4.5% as general government construction dropped 31.5%, the third consecutive collapse in public building. Figures are at constant 2018 prices, as published by the Philippine Statistics Authority in May 2026.

Fuel carried inflation from 2.0% to 4.1%

Headline inflation was 2.0% in January and 2.4% in February. In March it reached 4.1%, above the band. Diesel was 59.5% dearer than a year earlier and gasoline 27.3%, and the two accounted for 54.8% of the month's acceleration.

The BSP cut by 25 basis points in February, to 4.25%, then held at an off-cycle meeting in March as the shock arrived. The reversal came in April. The peso averaged 59.19 to the dollar in January.

The largest oil supply shock on record

Dubai crude averaged 62.73 dollars a barrel in January and 68.51 in February, already about 20% up on the start of the year. In mid-March, after attacks on regional energy infrastructure and the disruption of shipments through the Strait of Hormuz, Brent rose above 100 dollars. The World Bank describes it as the largest oil supply shock on record, with an initial loss of about 10 million barrels a day.

Spot prices were at their cheapest, then turned

January: 3.56 pesos per kilowatt-hour system-wide, down 18.6% on December, with Luzon at 3.25.

February: 3.50 system-wide, Luzon 2.69, Visayas 5.37, Mindanao 5.25.

March: 4.31 system-wide, Luzon 4.10, Visayas 5.08, Mindanao 4.43.

Figures from IEMOP's monthly market reports. February was the cheapest month of the year in Luzon; by March supply availability and demand had shifted.

Ten years of auctions and a storage mandate

On 13 February the DOE announced the ten-year Green Energy Auction plan: rounds GEA-5 to GEA-9 across 2026 and 2027, targeting 25 GW by 2035. On 27 February the ERC set the ceiling price for fixed-bottom offshore wind. On 2 March registration opened for GEA-5, 3,300 MW of offshore wind for delivery in 2028 to 2030.

26 February, DC2026-02-0008: every new solar and wind plant of 10 MW and above must integrate energy storage of at least 20% of installed capacity.

27 February: a coal bid round opened for 18 blocks in Semirara, Cagayan and Isabela.

Biomass, geothermal, solar, hydro and onshore wind are scheduled for GEA-9, the last round of the plan.

What it meant for a plant

Until March a site buying power from the grid had little reason to move: spot prices under 3 pesos in Luzon and a fuel bill falling year on year. From March the case reversed within weeks. For a plant burning a fuel the site already controls, husk, bagasse, wood residue or its own organic waste, this was the quarter the comparison turned. For a developer, the storage mandate changed the economics of the solar and wind that will compete in the coming rounds.

If your site produces a residue or runs a fuel-fired boiler, an energy and waste audit is where the arithmetic starts. Tell us about your site and an engineer replies with the data we need. The other editions are filed under the quarterly market brief.