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The cost structure of electricity in the Philippines and other Asian countries: A Comparative Note

Author

Listed:
  • Majah-Leah V. Ravago

    (Department of Economics, Ateneo de Manila University)

Abstract

This paper compares electricity cost structure in the Philippines vis-a-vis other Asian countries. The electricity prices in the Philippines are high by regional standards. From the comparative assessment, there is room for cost reduction from the various segments of the power supply chain in the Philippines. First is the utilization of an optimal mix of fuel sources based on the least-cost rule, where cost takes into account the environmental and health costs. The coal and petroleum excise taxes in the 2017 tax reform were a step in the right direction. As the costs of intermittent renewables, especially solar and storage, continue to fall, they may be increasingly attractive, especially in remote areas that use diesel-powered generators. Improvements in the thermal efficiency of coal-fired power plants could also help decrease the cost of fuel. Transmission and distribution losses in the Philippines are also high by regional standards. An assessment of the national grid code and technical audit may be warranted. Finally, the value-added tax in the Philippines is also high. Consumers in the Philippines are also taxed for systems losses and subsidies. Reevaluation of the tax base is also recommended.

Suggested Citation

  • Majah-Leah V. Ravago, 2023. "The cost structure of electricity in the Philippines and other Asian countries: A Comparative Note," Department of Economics, Ateneo de Manila University, Working Paper Series 202302, Department of Economics, Ateneo de Manila University.
    • Handle: RePEc:agy:dpaper:202302
    as

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    File URL: https://www.ateneo.edu/sites/default/files/2023-01/AdMU%20WP%202023-02_0.pdf
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    References listed on IDEAS

    as
    1. Bacon,Robert W., 2019. "Learning from Power Sector Reform : The Case of Pakistan," Policy Research Working Paper Series 8842, The World Bank.
    2. Bacon,Robert W., 2019. "Learning from Power Sector Reform : The Case of The Philippines," Policy Research Working Paper Series 8853, The World Bank.
    3. Sarah Lynne S. Daway & Raul V. Fabella, 2015. "Development progeria: the role of institutions and the exchange rate," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 52(2), pages 84-99, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Electricity; Electricity price; Philippines and Asia; deregulation;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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