Power rates

One of the thorniest problems we have in our quest for foreign investors is our expensive power rates.

- BOO CHANCO

There are many reasons why we have this problem. The two top ones are: first, our archipelagic geography and second, failures in energy policy.There is nothing we can do with our geography. But our failure to come up with energy policies that work is a continuing source of frustration among our people.

I was an early supporter of the Electric Power Industry Reform Act (EPIRA), the law that governs our power sector. Using market competition to keep power rates reasonable is a nice concept. It is better than the colossal mess with Napocor during the post-EDSA administrations.

The Cory Aquino administration failed to prioritize a viable energy program after she scuttled the nuclear plant and that resulted in massive brownouts.

FVR fixed the power supply problem by throwing a lot of money into the solution. He signed take-or-pay agreements with power companies for new power plants. FVR’s Napocor boys didn’t do a careful study of market demand and so he signed for more capacity than we needed.

The economy was so debilitated from Cory’s blackouts, bringing down power demand. We ended up paying for power we didn’t use and accumulated massive Napocor debts.

When EPIRA became law in 2001, the Power Sector Assets and Liabilities Management Corp. (PSALM) assumed Napocor’s debts of approximately $16.39 billion (roughly P834.29 billion at the time).

These obligations, including interest and other liabilities, peaked at P1.24 trillion by 2003. As of late 2025, PSALM reported it had reduced these financial obligations to approximately P260.6 billion, representing a 79 percent decrease from its 2003 peak.