Philippine energy market, third quarter 2025

The third quarter of 2025 was the quarter the slowdown became visible. Growth fell to 3.9%, the lowest in more than four years, and public construction stopped. Energy was the quiet part of the picture: fuel was cheap, the spot market reached its lowest in seven months, and inflation stayed below the target band.

This edition of our quarterly market brief covers July to September 2025. Compiled in September 2026 from the releases of the time, with the revisions the agencies have published since. Nothing here is a forecast.

Growth fell to 3.9% as public construction stopped

Real GDP grew 3.9% year on year (first reported at 4.0%, revised by the PSA to 3.9%). The same quarter a year earlier grew 5.2%, and the second quarter of 2025 grew 5.5%.

Household consumption grew 4.1%, government consumption 5.8%.

Gross capital formation contracted 2.8%, against growth of 12.8% a year earlier.

Fixed investment barely moved, at 0.1%.

General government construction fell 26.2%, the largest fall since 2011, as flood-control and other infrastructure spending was halted during a corruption investigation.

Figures are at constant 2018 prices, as published by the Philippine Statistics Authority.

Inflation stayed below the target band

Headline inflation was 0.9% in July, 1.5% in August and 1.7% in September, below the 2 to 4% band throughout. The central bank cut its policy rate by 25 basis points to 5.00% on 28 August, the third cut of the year. The peso averaged 57.51 to the dollar across 2025.

Fuel was cheap for the whole quarter

Dubai crude averaged 67.5 dollars a barrel and Australian thermal coal 110.5 dollars a tonne, both quarterly averages. With headline inflation under 2% there was no price story at the pump, and the diesel and electricity sub-indices moved with the headline.

Spot prices reached their lowest in seven months

The wholesale spot market fell through the quarter. IEMOP reported a system-wide average of 4.59 pesos per kilowatt-hour for the August billing period and 3.04 for September, the lowest in seven months. Luzon averaged 3.80 in September, against 4.14 for the first half of the year. Lower demand and adequate supply set the price, not fuel cost.

The auction programme was between rounds

The Department of Energy had issued the GEA-3 notices of award in June: 12 projects totalling 6,677 MW, of which 6,350 MW is pumped-storage hydro, 300 MW impounding hydro and 31 MW geothermal, for delivery between 2025 and 2035. GEA-4, the solar, wind and storage round, was in bidding through the quarter with awards due in November.

Carbon credits got a framework, not a price

On 23 September the DOE issued Department Circular DC2025-09-0018, the general guidelines for generating, managing and monitoring carbon credits in the energy sector. It sets out how credits from energy projects are recorded. It creates no compliance price, and there is still no official carbon-credit price series in the Philippines.

What it meant for a plant

This was a cheap quarter. Fuel, spot power and money were all inexpensive. The binding constraint was not the market but the public sector: a contractor base idled by the construction freeze, and a peso the central bank was content to let weaken.

If you run a fuel-fired boiler, this is the quarter your current steam cost should be measured against. An energy and waste audit is where that 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.