‘Government subsidy on electricity impossible’

MANILA, Philippines — Unlike Thailand, Malaysia and other regional peers, the Philippines lacks the fiscal capacity to provide government subsidies to shield Filipinos from rising electricity costs.

“It’s not possible. The subsidy comes from the Universal Charge for Missionary Electrification (UCME),” Energy Undersecretary Rowena Cristina Guevara said on the sidelines of the 2025 BusinessWorld Economic Forum.

Currently, the government supports power producers serving remote areas across the country through UCME, a non-bypassable charge imposed on on-grid consumers.

“But when it comes to subsidies at the consumer level, we don’t do that unlike other countries, which have cheaper electricity costs,” Guevara said.

In 2022, the Philippines ranked second in Southeast Asia for having high electricity rates, only trailing Singapore, according to a report by the Philippine Center for Investigative Journalism.

A 2024 data from the Department of Energy (DOE), meanwhile, showed that government subsidies in other Southeast Asian countries cover 36 to 66 percent of energy costs.

“If the subsidies were removed, their electricity costs would have been significantly higher,” Guevara said.

Sought for insights, economist Bienvenido Oplas Jr. said the Philippine government is not “financially and fiscally” capable of providing energy subsidies.

“Our annual budget deficit is already around P1.5 trillion a year, and our annual net borrowing is around P2 trillion a year,” Oplas told The STAR.

Earlier, Guevara said the Marcos administration would need close to P600 billion in funding to subsidize electricity prices in the country.

Aside from addressing soaring power costs, the government is also focused on achieving its total household electrification target by 2028.

The country’s electrification rate was only around 92 to 93 percent, with Mindanao lagging behind at just over 70 percent, latest DOE data showed.

To power every household in the Philippines, the DOE estimates the need of up to P100 billion in financing.

According to Guevara, energy officials are in talks with the Finance department to include funding in the budgets of the National Electrification Administration and National Power Corp.