‘Philippines needs P587 billion to subsidize electricity’

MANILA, Philippines — The country would need about P600 billion to provide energy subsidies and lower the cost of electricity nationwide, a senior energy official said.

“Do you know how much it will cost (to subsidize electricity)? It’s about P587 billion,” Energy Undersecretary Rowena Cristina Guevara said.

She said if this pushes through, the multi-billion-peso budget will come directly from taxpayers’ money, making it clear that “we will still be the ones paying for it.”

Citing an International Energy Consultants study, Guevara said the electricity rates of Manila Electric Co., the country’s largest power distributor, were seven percent lower than the world average.

Filipino consumers, however, have been experiencing greater impact from high power rates compared to those in Thailand, Taiwan, Vietnam, Malaysia and Sri Lanka, where government subsidies cover 36 to 66 percent of energy costs.

For instance, the Malaysian government owns Petronas, a multinational company in charge of all the oil and gas resources within the country.

“As a result, the price of their electricity is subsidized by the government,” the energy official noted.

On the other hand, most of the high-cost markets are heavily dependent on imported fossil fuels.

“That is the reason why we are pushing for renewable energy because the strong reliance on fossil fuels is driving electricity costs higher,” Guevara said.

The Department of Energy is also hoping that all electric cooperatives and distribution utilities in the country continue to enhance the reliability of their services as the government aims to hit upper middle-income status by 2025.

“If we become a high-middle-income country, people will start demanding reliable power. So it is our hope that the cooperatives will improve the reliability of their systems. That’s the only way for them to meet the demands of their customers,” Guevara added.