Workers inspect an electric meter installed above ground in Manila on January 11, 2024. Mark Demayo, ABS-CBN News/File

MANILA -- The Energy Regulatory Commission said it is focused on two pathways to bring down electricity rates in the Philippines.

In a press conference last week, Energy Secretary Raphael Lotilla announced that the Philippines no longer has the highest electricity rate in Southeast Asia. Singapore now has the highest rate. However for residential rate this April, the Philippines again has the highest charge.

According to ERC Chairperson Monalisa Dimalanta, the two pathways are decarbonization and democratization of rates.

Under decarbonization, the DOE and ERC pave the way for more renewable energy sources into the country's energy mix.

For democratization, more customers are allowed to choose electricity suppliers who offer lower prices than electric cooperatives and distribution utilities.

But Dimalanta admits, even with increased renewable energy sourcing and democratization, there will always be captive consumers who will rely on electric coops and utilities like meralco.

That's why, she says, the ERC will continue to monitor rates by conducting fuel audit and reviewing power supply agreements to guard against collusion among industry players.

REMOVING TAXES?

Bayan Muna Executive Vice President Atty. Carlos Zarate challenges newly elected legislators to push for the removal of taxes specifically the value added tax on electricity rates.

A DOE study reveals that electricity rates can go down by more than P1/kwh if all the taxes are removed.

Dimalanta says the ERC does not oppose the proposal to remove the VAT on power rates but the finance department should lay down which national projects or programs will be affected.

"Ano yung impact pag natanggal yung taxes na yun? Anong services naman ng gobyerno na pinupondahan ngayon ng mga taxes na yun ang medyo kailangan magsacrifice  kasi alam naman natin yung kinukolektang taxes napupunta sa public schools halimbawa o public health,"says Dimalanta.

Zarate is also pushing for government to re-enter the generation industry without regard for profit.

Neighboring countries like Malaysia, Indonesia and Thailand have rates lower than P10/kwh due to government subsidy while in the Philippines, ordinary consumers have no subsidy at all.

Customers connected to main grid, not the government, subsidize consumers in islands not connected to the main grid. 

THE NEED FOR MORE GENERATING CAPACITY

For Meralco Spokesman Joe Zaldarriaga, the key is increasing generating capacity, meaning building more power plants will ease electricity prices.

Though removing taxes will surely bring down rates, Zaldarriaga believes this is a policy issue which will entail debates before being acted upon by the legislators.