Socio-Economic Issues

on Energy

CERP 11
Power Situation: Philippines vs ASEAN countries
Power Situation: Philippines vs ASEAN countries
Power Situation: Philippines vs ASEAN countries
Power Situation: Philippines vs ASEAN countries
Philippines has one of the highest power cost in
ASEAN, losing out in comparison on the cost of
doing business.

Source of basic price data: Enerdata

Between 2000 and 2015, MERALCO’s effective residential electricity prices per
kilowatt hour rose by 77.20%, from an effective rate of P4.87 per kWh in 2000
to P8.9 in 2015.
Generation charge makes up about 48% of
the bill!

(Feed-in-Tariff)
Generation charge is relatively high in the
Philippines (2011)
R.A. 9136: Electric Power Industry Reform Act
of 2001 (EPIRA)
• Restructuring and privatization of the power industry in the
Philippines
• under the Power Sector Restructuring Program of the Asian
Development Bank (ADB)
• the private sector, through the independent power producers (IPPs),
performs the generation function traditionally done solely by the
government
• IPPs generate electricity for the government under a power purchase
agreement (PPA) with the government-owned National Power
Corporation (NPC)
Role of Government under EPIRA
• acts as regulator through the Energy Regulatory Commission (ERC)
• liquidates the assets and liabilities (600 Billion debts) of NPC through
Power Sector Assets and Liabilities Management (PSALM)
• continues to borrow/ contract loans to service the debts and
obligations of NPC and PSALM
• provides electricity to unviable areas through the small power utilities
group
• monitors and plans for the energy needs of the country through the
Department of Energy (DOE)
Impacts of Privatization
LABOR
• More than 2,000 NPC employees lost their jobs
• Job loss increases as electric cooperatives continue to be privatized
• Industrial workers don’t get wage hike because employers spend more
for high cost electricity
CONSUMERS
• Increased prices cuts other household expenditures (20% for electricity)
NATIONAL GOVERNMENT: increased debts, loans