The country should reform its electricity subsidy programs by improving beneficiary targeting and integrating existing social protection and regulatory systems to ensure assistance reaches intended recipients while reducing costs borne by other consumers and businesses, according to a local researcher.

A policy note published by the Philippine Institute for Development Studies (PIDS) authored by senior research fellow Kris Francisco underscored the weak targeting in the country’s major electricity subsidy programs that has led to substantial benefit leakages to nontargeted consumers.

Major subsidy programs

It cited three major electricity subsidy programs — the Universal Charge for Missionary Electrification (UCME), the lifeline rate, and the senior citizen discount — which play a key role in protecting vulnerable consumers.

“Nonsubsidized consumers, including businesses, bear the financial burden, adding to the already high electricity charges faced by consumers in the Philippines. Areas with a high concentration of lifeline households and senior citizen beneficiaries are particularly disadvantaged,” Francisco said.

He said that despite these challenges, the Philippines is in a relatively better position for evidence-based subsidy reform than most comparable countries due to existing assets that are currently underutilized but can be consolidated.

Francisco cited the Family Income and Expenditure Survey that provides household welfare indicators, and the Listahanan, or the National Household Targeting System for Poverty Reduction, that provides a location-specific list of the country’s poor households.

He said the Pantawid Pamilyang Pilipino Program demonstrates operational means-testing capacity at scale, while the Energy Regulatory Commission has decades of technical expertise in tariff design and subsidy oversight.