Philippines electric cooperatives face reliability crisis and push for reform

In the Philippines, several electric cooperatives are grappling with severe power supply problems. The First Catanduanes Electric Cooperative (FICELCO) reported daily brownouts lasting up to eight hours for more than 62,000 members due to generator failures, unsettled subsidy obligations and a stalled supplier selection process. In Albay, the Albay Electric Cooperative (ALECO) has become a flashpoint in a national debate over whether struggling cooperatives should be reformed or privatized, even as a P1.2 billion government rehabilitation program proceeds.

In Palawan, members of the Palawan Electric Cooperative (PALECO) staged a peaceful rally demanding affordable, reliable electricity despite the cooperative’s recent AAA performance rating. Residents describe frequent outages that undermine the rating’s meaning.

Separately, analysis of system‑loss standards shows that many Philippine electric cooperatives are allowed to recover higher losses—up to 8.25% of a bill, and as much as 12% for off‑grid units—compared with a 5.5% cap for private distributors. This higher allowance, combined with aging infrastructure and non‑technical losses such as theft, drives higher consumer costs and reduces incentives for upgrades. The President has proposed eliminating system‑loss charges and the associated 12% value‑added tax to ease the burden on customers.