Competitive Power Rates for Ecozones Toward Competitive Power Rates for All

Competitive Power Rates for Ecozones Toward Competitive Power Rates for All

AIM Policy Center
Carlo Francis V. Raymundo
Anna Mae T. Tuazon
July 2007

Electricity rates in the Philippines have been a deterrent to the competitiveness of local firms, which bear higher power utility costs than their counterparts in other countries. In the 2007 World Competitiveness Yearbook, the Philippines ranks 29 th out of 44 countries in terms of electricity costs for industrial clients. In order to create an enabling environment for business, quality electric power should be made available and affordable.

Among the hardest hit by the steep electricity rates in the Philippines are the large industrial users, which allocate millions of pesos in operating costs to cover power usage. A number of such organizations are located in the public and private economic zones across the country. While they are able to viably operate and significantly contribute to the country’s economy, many economic zone enterprises have continuously appealed for relief from the burden of high electricity rates in order for them to be more productive. The Philippine Economic Zone Authority (PEZA), the government agency which oversees the successful operation of economic zones, for its part, is committed to address this issue, especially in the wake of a legal opinion issued by the Department of Justice, affirming PEZA’s regulatory function over its estates.