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

Majah-Leah Ravago

No 202302, Department of Economics, Ateneo de Manila University, Working Paper Series from 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.

Keywords: Electricity; Electricity price; Philippines and Asia; deregulation (search for similar items in EconPapers)
JEL-codes: L4 Q41 Q48 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2023-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-sea
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