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This latest crisis is but a reminder of the harsh and brutal reality for every ordinary Filipino, for as long as we are dependent on imported fuels: every price fluctuation in the global oil market strips away our spending power
The world is facing the greatest global energy security threat in history. And the Philippines is feeling the full weight of its decades-long dependence on imported fuels.
As a net importer of fossil fuels, the Philippines is at the mercy of price changes in world markets. Since the United States and Israel’s attack on Iran on February 28, oil price hikes have been imposed on Filipinos on a weekly basis. That has been exacerbated by the peso’s slide past the P60 mark against the US dollar, pushing up prices of basic necessities, including electricity.
Consider how changes in the prices of liquefied natural gas (LNG) and coal — the two primary sources of energy of the country’s largest electric utility Meralco — could affect its over 8 million customers.
The price of LNG imported to East Asia, the JKM LNG, has surged by 91% since the Middle East conflict started. Newcastle Coal price, the global benchmark for the commodity, saw a price jump by 17%. According to our computation at the Center for Energy, Ecology and Development (CEED), Meralco’s blended generation rate could see an increase of P5 per kilowatt hour (kWh) based on its March 2026 rates.
This latest crisis is but a reminder of the harsh and brutal reality for every ordinary Filipino, for as long as we are dependent on imported fuels: every price fluctuation in the global oil market strips away our spending power.
The Marcos Jr. administration could come up with short-term cures for this energy crisis all it wants. More dole outs, more harmful backward fixes, like the suspension of the country’s moratorium on coal-fired power plants.
But the crux of the problem remains: the Philippines will always find itself in this predicament if the government does not take decisive steps toward long-term change with how its power supply is sourced.
Fortunately, this administration already has the infrastructure and policy to diversify its power sources and provide more impactful short- and long-term solutions to this energy crisis.
In the short term, the government could move, even by tomorrow, to accelerate installment of distributed renewable energy systems at the individual and institutional level. A 1-megawatt (MW) utility-scale solar plant could be finished in as quickly as four months. A solar panel for households could be installed in a day.
A 500-watt grid-tied solar rooftop system could yield P1,200 worth of savings for a household consuming less than 200 kWh. Naysayers may balk at the price of such a system, which could cost about P27,000 from authorized dealers. This is where the government could step in — suppose it could provide a financing mechanism for these rooftop systems for a million households. That could help them collectively save P373.1 million in a month.
On an institutional level, the Marcos administration should also compel various units of the government to fast-track approvals for utility-level solar projects.
According to the Department of Energy, the fourth round of the Green Energy Auction Program is set to deliver 1,575.62 MW of solar generation capacity by the end of 2026. With this energy crisis, it would be a welcome move for the government to fast-track these projects. After all, this could already mean an additional 1.5 gigawatt of energy supply, about the capacity of two coal-fired power plants.
The Marcos administration, through the Energy Regulatory Commission (ERC), should also exercise its police power to its full capacity, as mandated by the power it wields under the Electric Power Industry Reform Act, and impose proactive measures against the imminent spike in electricity costs.
First off, the ERC should move to suspend — and ultimately totally prohibit — fuel cost pass-through fees in power bills.
The generation rate, or the cost passed on to the consumers by the generation companies and distribution utilities, accounts for about 60% of consumers’ electric bills. In the case of Meralco, it draws 60% of its energy supply from gas and 25% from coal. These sourcing decisions were made unilaterally, without any consumer consultation, yet it is the consumers who are now forced to foot the bill.
With the Middle East conflict seeing no signs of abatement, the generation cost will only rise in the foreseeable future. Suspending pass-through fees is a necessary and prudent move the government could make to protect Filipinos from further damage from this energy crisis.
The President should also move to suspend regressive taxes on petroleum products, especially the excise tax and the 12% value added tax imposed on them. Congress already hurried to pass Republic Act No. 12316 to give the President the power to limit and even suspend excise taxes on petroleum products. Yet the administration has chosen to stand idly by, with deeper concern for government coffers over ordinary Filipinos’ plight.
The Department of Finance has reasoned that LPG consumption is highest among poorest households, and, therefore, an excise suspension on LPG would be most beneficial. But it looks to have conveniently forgotten how a suspension of excise tax on diesel and gas — the commodity that powers our transportation and energy sectors — would benefit the economy as a whole.
This is not the Philippines’ first go at a power crisis. We saw this in 2022, when the Ukraine war similarly sent electricity prices up, and we see it in the chronic instability of a grid that fails to meet demand year after year.
It’s high time the Philippine government abandoned its passive stance and proactively protected its constituents from the harsh impact of this energy crisis. The tools to do so exist. The only thing missing is the political will to use them to prioritize the Filipino consumer. – Rappler.com
Gerry Arances is the executive director of clean energy and sustainability think tank CEED and convenor of the Power for People Coalition, a broad network of civil society organizations, consumer groups, faith-based groups, and communities across the Philippines promoting clean and affordable energy for all Filipinos.
