Philippine Government Introduces Anti-Bill Shock Loans to Stabilize Summer Electricity Rates

In a proactive move to mitigate the spike in electricity costs during the summer, the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) have mandated power distribution utilities to utilize the Anti-Bill Shock lending program offered by the Landbank of the Philippines (LBP). This directive, backed by President Ferdinand Marcos Jr., aims to provide financial relief to Filipino households facing increased energy demands and rising temperatures.

The program, initiated by LBP in April 2023, is designed to help electricity distributors manage the seasonal surge in power consumption without the immediate financial burden on consumers. Under the scheme, distribution utilities can borrow up to 80% of the incremental increase in power generation and transmission charges. This approach allows these utilities to spread out the cost increases over up to nine months, ensuring that consumers are not overwhelmed by sudden hikes in their electricity bills.

DOE Secretary Raphael Lotilla emphasized the government’s commitment to easing household financial burdens, particularly during peak usage periods. “As we confront the challenges of rising temperatures and increased energy demands, we are working closely with other government agencies to ease the burden of Filipino households from the expected surge of electricity costs,” Lotilla stated. The involvement of Landbank is seen as crucial in this coordinated effort to safeguard the welfare of the citizens.

ERC Chairperson and CEO Monalisa Dimalanta highlighted the mutual benefits of the lending program, describing it as a “win-win situation” for both utilities and consumers. “It helps ensure sufficient and affordable energy access nationwide while protecting Filipino households from electricity bill shock during the summer season,” Dimalanta explained.

The terms of the loan ensure that the borrowing costs are not transferred to consumers, who might struggle to cover increased rates. Instead, these costs are absorbed by the utilities with the aid of the concessional loan rates provided by LBP. Additionally, each power distributor is required to implement its own anti-bill shock program to further shield their clients from potential rate increases.

Lynette Ortiz, President and CEO of LBP, reaffirmed the bank’s commitment to the energy sector, stating, “We are poised to forge deeper collaborations within the sector, advocating for the interests of both energy providers and consumers.” Since its inception, the Anti-Bill Shock lending program has approved P450 million worth of loans to electricity cooperatives, illustrating its significant impact on the industry.

This strategic financial mechanism is part of a broader government initiative to stabilize energy costs and support economic stability. By providing these essential supports, the government hopes to not only manage the cost of living but also foster a more resilient national energy market.