The simple truth about Epira
In philosophy, Occam’s razor suggests that the simplest explanation is usually the right one. It’s a rule of thumb worth applying to a puzzle that has long confounded policymakers: Why is electricity in the Philippines among the costliest in the region?
Too often Filipinos are told that lawful “pass-through” charges, along with external forces like global fuel prices or the weakening peso, are the culprits behind so-called bill shocks, clarifications accompanied by complex rate-setting formulas and technical jargon.
But Occam’s razor offers a straighter, if not more honest, answer: the Electric Power Industry Reform Act (Epira) of 2001 has failed to deliver on its promise of affordable energy.
Enacted 25 years ago, Epira was sold as a panacea for the state monopoly era of the 1990s, one that would foster competition on one hand and drive down prices with the other.
Alas, that dream remains unfulfilled.
Third highest power rates
Based on 2023-2026 averages compiled by data firm Global Petrol Prices, the country has the third highest power rates in Asia. Singapore topped the list, charging P14.28 per kilowatt hour (kWh) for residential households, followed by Japan with P13.97 per kWh, and the Philippines with P12.69.
Did Epira champions envision a system that would prioritize private profits while passing every conceivable burden onto the household budget? These run the gamut from system losses due to pilferage and lifeline subsidies for the marginalized to senior citizen discounts and renewable energy projects.
Recent bill shocks have once again put the Energy Regulatory Commission (ERC) and Manila Electric Co. (Meralco) on the defensive. ERC maintains it is just implementing Epira or other laws in collecting these charges, while Meralco insists it’s just the bill collector. But for a minimum wage earner in Metro Manila, this is a distinction without a difference.
Why is the consumer the default shock absorber for every social and corporate cost? Consider the lifeline subsidy and the funding for the Pantawid Pamilyang Pilipino Program. While protection for the marginalized is a noble state duty, isn’t it a duty that should be funded via taxation?
Likewise, shouldn’t the government and private sector foot the bill for “green energy auction allowances” and “feed-in tariffs” if they want to entice renewable energy investment?
Regressive form of collection
Some may argue that shifting social costs to the national budget merely moves the burden from the power consumer to the taxpayer.
But the point is equity: Electricity bills are a regressive form of collection that penalizes unsubsidized consumers with flat-rate surcharges that ignore one’s ability to pay. By contrast, social protection programs identified in the budget may be funded through a tax system that is, for the most part, progressive.
To keep pass-through items on a utility bill is to essentially outsource the state’s welfare mandate to the private sector, forcing the middle class to serve as financier to every beneficiary while insulating energy giants from costs.
The Department of Energy (DOE) often points to the progress of the national electrification rate, now at 91.15 percent. But reaching the last mile is an empty victory if power remains expensive.
The cross-ownership loophole within Epira is another matter.
The law allows distribution utilities to own or have stakes in the very generation companies they buy power from, leading to what Makabayan lawmakers describe as “sweetheart deals” and “midnight PSAs (power supply agreements).” This bypasses the spirit of competition Epira was supposed to engender.
Review of Epira
In July 2024, President Marcos called for a review of Epira. In November 2025, ERC said it was consolidating key proposals to amend the law. Meanwhile, the 45th Epira Status Report released by DOE in February crowed about the “significant progress in building a competitive, transparent, and financially sustainable power sector.”
Sonny Africa, executive director of Ibon Foundation, acknowledged many factors behind the high cost of electricity, “but there’s no doubt that among the most urgent is the need for power sector reforms.”
He lamented, however, that proponents of Epira amendments “are oblivious to how privatized power is the root cause of high electricity prices, market manipulation, and inadequate infrastructure investment.” He argued for a strategic reclaiming of the power sector in the public interest.
Indeed, there must be more to energy policy than pass-through charges. Filipinos should not be forced to pay for stolen electricity, stranded debts, missionary electrification and watershed rehabilitation–causes that serve the public, yet are billed as private burdens.
It’s high time to apply Occam’s razor to Epira itself: If a law designed to bring down power costs has resulted in some of the highest rates in the region, the simplest explanation is that the law is the problem.
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