The Institute for Climate and Sustainable Cities (ICSC), a Philippine-based energy think tank, urged the government to address high electricity costs as the country prepares to become an upper-middle-income country (UMIC) next year.
Jephraim Manansala, the ICSC’s chief data scientist, said the Philippines’ economic growth and development would increase energy demand. More industries would require a stable and increased energy supply, leading to higher overall consumption.
“High electricity costs may discourage industries from expanding their operations due to the prohibitive expenses,” Manansala said. “These costs can hinder progress toward upper-middle-income status due to their direct correlation with the Gini coefficient, which measures income inequality.”
He said the high electricity rates could undermine the Philippines’ economic growth. “This underscores the urgent need to improve the country’s power supply mix by diversifying toward indigenous, distributed, and flexible energy resources,” he said.
The current power supply mix is dominated by coal, which accounts for about 60 percent of the supply, making the country vulnerable to price shocks due to international geopolitical conflicts.
“By prioritizing indigenous and renewable energy resources, the Philippines could minimize its exposure to the volatile global energy markets,” Manansala said.
The country is rich in indigenous energy resources across its islands, which can help diversify power supply and reduce dependence on imported and expensive energy commodities.
The Philippines currently aims to achieve a 35 percent renewable energy share by 2030, 50 percent by 2040, and over 50 percent by 2050.
“The ICSC fully supports this goal set by the Department of Energy, but we must emphasize that drastic changes need to be implemented in the country’s power system planning and policy-making today,” Manansala said. “Prioritizing flexibility and decentralization is crucial to meeting the energy needs of the Philippines while providing clean, affordable, and secure electricity for all.”
