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P80-B subsidy needed to lower PH power rates

The government will need to shell out at least P80 billion in annual subsidy for the power sector to gain that leverage of lowering rates to the level of the subsidized energy markets of Asian neighbors.

This has been the assessment of Australian consulting firm International Energy Consultants (IEC) and its prescription on the never-ending debate if there are measures that can be done to bring down power rates similar to those enjoyed by other countries.

Filipinos are incessantly complaining about perceived high electricity tariffs, despite recent result of the IEC survey indicating that power rates in the franchise area of Manila Electric Company (Meralco) had already been down 28 percent (excluding the value-added tax component) compared to 2012.

IEC Managing Director John Morris said “government subsidies continued to play to make power rates artificially low in markets like Thailand, Indonesia, Malaysia, South Korea and Taiwan.”

For these five countries, their aggregate subsidies for electricity had been estimated at $50 billion for 2015 alone.  South Korea funneled the biggest subsidy at $18.4 billion; then Indonesia at $12.8 billion; Taiwan at $8.5 billion; Thailand at $5.1 billion; and Malaysia at $4.3 billion.

Morris said the equivalent subsidy of these specified countries as integrated in their power rates had been 4.2 US cents or R1.96 per kilowatt-hour.

Amid the harrowing fiscal smash of such subsidies in the government budgets of these countries, their cheaper electricity rates remained an interminable envy of Filipino consumers.