Philippine electricity rates still highest in Southeast Asia

MANILA, Philippines - Philippine power rates remain one of the highest in Southeast Asia as of end-2016 due to continued lack of government subsidies, latest Department of Energy (DOE) data showed.

Based on the Power Development Plan 2017 to 2040 released yesterday, the country’s power rates are among the highest in the region, at par with the level in Singapore.

In terms of electricity rates to industries, both countries have rates of P5.84 per kilowatt-hour (kwh).

But in terms of commercial and household rates, the Philippines has the highest at P7.49 per kwh and P8.90 per kwh, respectively.

Singapore, on the other hand, has a uniform rate of P7.27 per kwh for both commercial and household.

In its report, the DOE said a major reason for the higher prices is the absence of government subsidies.

“Thailand, Indonesia and Malaysia arguably have subsidies. In addition, taxes, fees, and other charges are also levied on the power industry sectors composed of the generation, transmission, and distribution levels which constitute a portion on electricity rates in the Philippines,” it said.

However, the DOE said this allows for greater transparency in unbundling the items that comprise overall electricity rates.

“In view of this, greater transparency of having reasonably-priced electricity rates through more unbundling of items in the energy supply chain remains part of the major thrusts of the DOE, its attached agencies, and the Energy Regulatory Commission,” it said.

Last year, a study made by Australia-based International Energy Consultants (IEC) showed the rates of Manila Electric Co. (Meralco)—the country’s largest power distributor—have moved from second highest in Asia to third highest in the region, fourth in Asia Pacific and 16th worldwide.

IEC said Meralco’s average rates, excluding taxes, have declined 28 percent from January 2012 to January 2016. This compares with the average decline of 19 percent across 44 countries covered by the survey.

This is mainly due to the reduction in cost of power generation, brought down mainly by lower fuel costs, over the four-year period.