Philippine energy market, fourth quarter 2023

The fourth quarter closed 2023 at 5.6% growth for the year and 6.0% average inflation, with the policy rate at 6.50% — the highest in sixteen years — and December inflation back inside the band at 3.9%. Thermal coal ended the year at about a third of its 2022 average.

This edition of the quarterly market brief covers October to December 2023. Compiled in September 2026 from the releases of the time, with the revisions the agencies have published since. Nothing here is a forecast.

The year in one line

Real GDP grew 5.6% in the quarter and 5.6% for 2023, against 7.6% in 2022. Headline inflation fell from 8.7% in January to 3.9% in December, averaging 6.0% for the year.

The peak of the rate cycle

The policy rate stood at 6.50% after the October increase and stayed there through the quarter. Money was as expensive as it had been since 2007, which is the single most important fact for anyone who financed a plant in 2023 or 2024.

Fuel at pre-crisis levels

Dubai crude averaged about 84 dollars a barrel. Australian thermal coal averaged about 135 dollars a tonne, back to where it had been before the 2021 run-up. The retail electricity tariff was still working through the earlier cost, so the bill and the commodity were pointing in opposite directions again.

Policy: the plan and the pipeline

The Philippine Energy Plan set the framework for the auction rounds to come, with renewable capacity targets to 2040 and a growing role for storage. The third Green Energy Auction was in preparation for geothermal, impounding hydro and pumped storage.

What it meant for a plant

Cheap fuel and expensive money is the combination that stops projects, and it stopped a number of them in 2024. The exception, again, was the site whose case rests on a disposal cost rather than a fuel price: that cost was unchanged, and in many places rising with the new packaging-recovery obligations.

For a developer, the auction pipeline is the offtake question and the peso is the equipment question. We work with developers and technology providers on the Philippine execution side of both. Tell us about the project, or read the other editions under the quarterly market brief.