Subdued inflation has reopened the policy discussion around monetary support, offering potential relief for capital-intensive sectors such as energy and infrastructure. With price pressures remaining below target, financing conditions remain relatively supportive, helping keep borrowing costs manageable for long-term projects.
For energy companies, this is a critical factor. Power generation, transmission, and water infrastructure all depend on stable financing assumptions, often stretching across decades. Low inflation reduces pressure on interest rates, supporting refinancing activity and improving project viability.
However, currency risk remains a key constraint. While the peso has shown periods of strength, analysts continue to view this as cyclical rather than structural. A weakening external position and ongoing import dependence, particularly for fuel and equipment, mean that policy easing must be carefully calibrated.
This has direct implications for energy firms with foreign currency exposure. LNG importers, fuel-dependent generators, and developers sourcing equipment offshore remain sensitive to exchange rate volatility. Even modest currency swings can materially affect operating costs and debt servicing.
From a policy standpoint, authorities face a balancing act. Supporting growth and infrastructure development must be weighed against preserving currency stability. As a result, any policy easing is likely to be measured rather than aggressive.
Corporates are responding by strengthening hedging strategies, reassessing currency risk assumptions, and favoring financing structures that limit FX exposure. Local currency funding and phased investment approaches are gaining favor.
The broader message is clear: low inflation helps, but it does not eliminate risk. For the energy sector, financial discipline and currency management remain as important as policy support.