Consumer Advocates Push for Power Rate Reforms in the Philippines

A consumer group has voiced its concerns over the Philippines’ high electricity rates, which are among the highest in Asia, arguing that they deter both foreign and domestic investors from establishing businesses in the country. The United Filipino Consumers and Commuters (UFCC) highlighted that the steep power rates pose a significant obstacle to the nation’s economic ambitions.

The group’s criticism comes in the wake of a recent announcement by Manila Electric Co. (Meralco), which services areas contributing to over 75% of the Philippines’ economy, that electricity rates have surged by 57 centavos per kilowatt hour. This hike translates to an additional P114 on the monthly bill for households consuming 200 kWh.

Rodolfo Javellana Jr., president of UFCC, pointed out that such prohibitive costs of electricity, largely influenced by monopolistic control over the sector, are a major disincentive for investment. He emphasized the need for legislative reform to foster a more investor-friendly business environment, specifically calling for amendments to the Electric Power Industry Reform Act (Epira) of 2001. According to Javellana, revising Epira is essential for reducing electricity costs and thus, making the Philippines more attractive to investors.

The group’s stance is that lowering electricity rates is crucial for attracting foreign direct investments and supporting the government’s “Bagong Pilipinas” (New Philippines) initiatives aimed at economic development.

Senator Nancy Binay also acknowledged the issue, citing “inconsistent electricity policies” as a barrier to investment. She agrees that legislative action is needed to address these challenges.

Meralco, on its part, attributed the recent rate increase to the higher costs of power sourced from Independent Power Producers and Power Supply Agreements.

The call for Epira amendment is seen as a pivotal move towards achieving a more competitive and equitable energy sector, crucial for the Philippines’ economic growth and investment appeal.