Dear OIC-Secretary,
Warm greetings.
We write to respectfully challenge the Department of Energy’s recent public statement declaring that subsidizing electricity is “impossible” due to the projected ₱600 billion annual cost. (https://www.philstar.com/business/2025/05/24/2445327/government-subsidy-electricity-impossible).
With due respect, we assert that such a conclusion is not based on fiscal incapacity but reflects a policy choice—one that regrettably does not prioritize the welfare of Filipino electricity consumers, especially the most vulnerable residential users.
The Philippine government currently implements targeted social assistance programs such as the Pantawid Pamilyang Pilipino Program (4Ps), AYUDA, and fuel subsidies for public utility vehicle (PUV) operators. These programs affirm the State’s ability to provide meaningful, well-structured support to disadvantaged sectors when there is political will.
It is therefore difficult to accept that electricity subsidies—critical to easing the burden of rising energy costs—are deemed “impossible.”
Even more concerning, residential consumers are already subsidizing commercial and industrial users under MERALCO’s existing rate structure, where distribution charges for households are significantly higher than those for big businesses. This built-in cross-subsidy places the heaviest burden on ordinary families, while large users benefit from preferential rates.
If this reverse subsidy is permitted and normalized, why then can’t the government do the same for residential consumers—this time, in their favor?
Furthermore, the recently approved ₱19.9 billion MERALCO refund, to be returned to consumers over 36 months without interest, illustrates how consumer funds are effectively used to subsidize utility operations, while households continue to shoulder full costs with little relief.
Beyond equity and fairness, targeted electricity subsidies can also be economically strategic. Lower residential rates enhance the Philippines’ attractiveness to investors, reduce operating costs for micro and small enterprises, and create jobs—outcomes that generate government revenues and justify the initial subsidy investment.
We therefore urge the Department to reconsider its current stance. Electricity subsidies are not fiscally impossible—they are socially just, economically rational, and entirely feasible if treated as a priority.
Thank you and we look forward to your thoughtful consideration.
Thank you.
Very truly yours
PETE L ILAGAN
President