The Political Economy of the Electricity Sector in the Philippines

The Philippines encounter a rapidly growing electricity demand, which is mainly to be met with coal. The capacity of coal plants is projected to double by 2025. The reasons for choosing one energy source over another is not straight forward as it is the result of a complex interplay of political economy factors. To understand the Philippines’ focus on coal it is crucial to first understand the drivers of energy policy formulation. We shed light on actors, their objectives and how they can influence policy making given contextual country factors following a novel political economy framework. To do so we conduct 35 semi-structured interviews with experts central to energy policy formulation. We identify the following four main goals: reduce energy poverty, electricity security, ecological and social sustainability, and securing market power and profits. As the Philippines suffered in the past (and partly still do today) from severe brownouts and electricity poverty the political actors mainly focus on increasing baseload capacity using a technology neutral approach, which, under the given policies, often results in coal. This might be partly due to the influence of powerful conglomerates who control the electricity market ever since its privatization in 2001. Many social actors, e.g. NGOs, unions and the church, often raise concerns on environmental matters on the provincial level. This takes place against the backdrop of electricity prices that are among the highest in Asia, low fossil fuel but high renewable energy resources and the nonexistent of a national interconnected grid due to the geographical condition. These insights on the political economy of electricity in the Philippines can help to identify possible entry points for climate mitigation policies that are feasible.