Senator Bam Aquino called for a systemic shift in how electricity discounts are funded, arguing on Tuesday, April 28, that the national budget—rather than ordinary consumers—should shoulder the cost of subsidies for marginalized sectors.
Through Senate Resolution No. 375, Aquino urged the Senate Committee on Energy to investigate the current financing structure of the “lifeline rate” established under Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA).
Under the existing cross-subsidy mechanism, the discounts provided to low-income users and senior citizens are passed on to other consumers, effectively increasing the monthly bills of those who do not qualify for the aid.
“Let’s look into this additional payment. There are already many poor Filipinos and the middle class. The people’s expenses should not increase if the government has money for aid,” Aquino stated, emphasizing the need to protect the public from unnecessary financial strain during the current oil crisis.
The move comes as Manila Electric Company (Meralco) customers reported a spike in their April billing. Meralco’s head of corporate communications, Joe Zaldarriaga, explained that the increase was driven by higher generation charges and a weaker peso.
He clarified that the subsidies currently appearing on bills are government-mandated “pass-through” charges.
Aquino pointed out that this setup places an unfair weight on the “missing middle”—households that are not wealthy but do not qualify for social protection programs.
“Current reliance on cross-subsidy mechanisms results in a redistribution of costs that may place a disproportionate and cumulative burden on non-beneficiary consumers, particularly low- and middle-income households who do not qualify for existing subsidies,” the senator noted.
The proposed policy review aims to find a more transparent and sustainable way to provide socialized electricity rates. By utilizing the national budget, Aquino believes the government can maintain essential aid without penalizing other workers and families.
“The objective of this policy review is not to remove or diminish the lifeline rate subsidy, but to ensure that it remains well-targeted, fiscally sustainable, and equitably financed, without unduly shifting the burden to other electricity consumers,” Aquino stressed.