[OPINION] The lifeline subsidy belongs in the national budget
Meralco rates climbed from P13.17 to P14.35 per kilowatt-hour between February and April, almost a P1.20 jump. Senators Bam Aquino and Risa Hontiveros have asked the Senate to investigate the increase. On social media, the lifeline subsidy has become a flashpoint, pitting consumers against the poor the help was intended for.
But the subsidy is not why our bills are climbing. The lifeline charge is but a single centavo per kilowatt-hour, the smallest percentage on the bill.
The April 2026 bill jump came from a much larger line item: the generation charge, which is what Meralco pays the power plants and suppliers that produce the electricity it offers to us. The peso has fallen past P60 to the dollar, and because most of Meralco’s generation costs are denominated in dollars, those costs rise as the peso weakens. The Wholesale Electricity Spot Market, where Meralco buys power on demand, is also spiking from Middle East fuel pressures and tight Luzon supply. The state and Meralco do not buffer that volatility, so Filipino customers pay the difference.
It's unfair that the lifeline rate gets a bad rep from the skyrocketing bills. The lifeline rate was meant to do something good. It guarantees a 100% discount on the first 50 kilowatt-hours of electricity for the country’s poorest households. Most Filipinos would say that is the right thing to do. While the intent is good, the problem is that it does not belong on a private utility bill. A subsidy for the poorest Filipinos belongs in the national budget, paid for through general taxation, where it can be designed to reach the people it was built for.
If the lifeline subsidy stays on consumer bills, it will keep failing the poor it was built for and the people paying for it.
While our bills are increasing, it turns out that the lifeline charge that we pay each month to fund a necessary program did not even reach the people it was meant for. Out of 4.5 million eligible households, only 330,000 ever enrolled, which is a meager 7%. For decades, the program asked the very poor to gather documents and verify eligibility, and most never made it through the tedious process. Most of them are daily wage workers who cannot afford a day off to line up for a benefit they were not informed of. The DSWD and the ERC only fixed this in January 2026 with Joint Resolution No. 1, which automated enrollment. Until then, every other consumer was subsidizing a program that seldom reached its beneficiaries.
The proposed fix is straightforward: Move the subsidy off consumer bills and into the national budget. The objection people raise is that this just moves the cost from our bill to our taxes. But that argument confuses the difference between two very different ways of paying. A flat per-kilowatt-hour cost on our bills charges a construction worker and a corporate executive the same way, regardless of what either of them earns. If we move the cost to our taxes, a well-designed progressive tax system could make a corporate executive pay more in taxes than a construction worker. Our share depends on what we earn rather than on how much electricity we happen to use.
In fact, subsidizing programs through the national budget is what most, if not all, of our Southeast Asian neighbors have already been doing. Their electricity subsidies come out of general taxation, which draws on multiple sources, including the progressive income tax. Indonesia spends roughly 5% of its central government budget on the program. Indonesians pay less than half of what we do per kilowatt-hour, and the poor receive the subsidy because the state delivers it directly. Meanwhile, we have been paying for ours and not getting the help delivered.
I want to be honest, though. Moving the lifeline subsidy off our bill will not make our bill cheap. The bigger relief, the kind that lowers what we pay every month, requires renegotiating the dollar-denominated power supply agreements that drive generation costs and rebuilding the state’s role in absorbing fuel and currency risk. That is a longer fight, and it means confronting the architecture EPIRA established in 2001. But this reform sets the precedent that consumers should not be financing what the state should finance. It is the foothold that makes the bigger fight possible.
Sen. Aquino’s proposal to move the lifeline subsidy from consumer bills to the national budget should pass. So should Sen. Hontiveros' call for the ERC to examine excessive past charges. But Congress and the executive branch owe Filipinos more than a hearing. They owe us an answer to a lingering question they have avoided since 2001: Why does our safety net live on a private utility bill and not in the national budget? Until they resolve this, the poor will keep missing the subsidy, and the rest of us will keep paying for help that does not arrive. They need to take it off our bills and finally build a safety net that reaches the people it was for.
Disclaimer: The views expressed in this article are those of the author and do not reflect the opinions of PhilSTAR L!fe, its parent company and affiliates, or its staff.