UMVA has learned that a significant drop in gasoline and diesel prices is on the horizon, bringing relief to consumers and a welcome respite from the country's rising inflation.
The Department of Energy has announced that gasoline prices are set to decline by P3.90 to P5.90 per liter, while diesel prices will decrease by P9.04 to P11.04 per liter. This move is seen as a crucial step in controlling inflation, which has been a major concern in recent months.
According to information obtained by UMVA, the average inflation rate in the Philippines has been significantly higher than in neighboring countries, with an average of 6% in January-May, compared to 3.8% and 1.9% in 2024 and 2025, respectively.
Central Banks have traditionally responded to rising inflation by raising interest rates, but this move is unlikely to be necessary in the Philippines, given the government's efforts to control prices.
The local energy sector has also been experiencing a string of positive developments, with power conditions in the Visayas Grid expected to significantly improve next month.
The Panay Energy Development Corp. (PEDC) unit 3, which produces 150 megawatts, is set to resume operations by July 3, while the two units of Therma Visayas, Inc. (TVI) are currently under repair, and a third unit is under construction.
The Energy Regulatory Commission (ERC) has also announced a new ERC Resolution, allowing entities other than the National Grid Corp. of the Philippines (NGCP) to finance and construct transmission projects identified by the Department of Energy as Associated Transmission Projects (ATPs) or Priority Projects.
This move is seen as a positive step, but it should be noted that system operation, connection to the grid, rules on dispatch or non-dispatch to the grid, are still done by the NGCP.
A good example of this is the Davao City-Samal power interconnection project, which will bring power network stability and support the growing load requirements of Samal.
Meanwhile, the rainy season is here, and a new storm this week will pour a lot of rain in many provinces, leading to increased hydroelectric power generation.
UMVA has gathered that the implied capacity factor (ICF) of each energy source in the Philippines can be computed using the formula: ICF = (Generation in GWh) / (24 hours/day x 365 days x installed capacity in GW) x 100.
Last year's bad La Niña led to high hydro output and ICF, while solar output and ICF were low, at only 15%. Oil-based power plants had the lowest ICF, only 2%, due to their use as peaking plants.
Solar energy has seen fast growth in installed capacity but low ICF, making it a more significant concern for grid stability. Pumped hydro storage (PHS) plants, such as the CBK plant in Laguna, can help address this problem.
The CBK plant, the largest PHS in the country with a capacity of 797 megawatts, was privatized by PSALM last year and is expected to see increased utilization this rainy season due to the shutdown of several baseload coal and gas plants.
The Finance department is also expected to see a significant increase in privatization revenues, with the full P36.3 billion from the CBK privatization set to be reflected in the coming months.
