There’s a profound idea, born from the mind of a Jesuit philosopher, that explains much about progress: all truly good things unfold over time, inevitably passing through periods of disruption before reaching lasting strength. This “law of all progress” feels particularly relevant when examining the story of electricity in the Philippines.
In January 2024, a landmark event occurred – the Mindanao-Visayas Interconnection Project (MVIP) was energized. For the first time, excess power could flow between the major islands of Mindanao and the Visayas, and ultimately, contribute to Luzon’s needs. It felt like a pivotal moment, a step towards a unified, modern power system for the entire nation.
The narrative emerging from this development suggests a fully integrated grid, operating under the principles of competition established by the Electric Power Industry Reform Act of 2001. A dynamic market, multiple players, and a shared journey towards energy independence – that’s the picture painted by headlines and industry discussions.
But the reality is far more complex. While the MVIP does connect Luzon, Visayas, and Mindanao under the National Grid Corp. of the Philippines, a significant portion of the country remains disconnected from this progress. Almost 200 municipalities, spread across 35 provinces, still operate under a pre-2001 system.
In these geographically isolated communities, reliable electricity is a luxury, often available only for limited hours each day. There’s no wholesale electricity market, no ability to choose suppliers, and no power sharing between islands. Residents are entirely reliant on local distribution utilities, often with only one power source available.
The financial burden of this disparity falls disproportionately on those *with* access to the main grid. While off-grid communities receive subsidized rates, the difference between the actual cost of power and what they pay is covered by a charge levied on all other customers – a system known as the Universal Charge Missionary Electrification.
Recent data reveals a stark imbalance. In 2023, supplying power to off-grid areas cost P39.62 billion, with P26.95 billion subsidized by those connected to the main grid. Only 32% of the actual cost was recovered through payments from off-grid consumers themselves.
Efforts to address these imbalances are underway, but a fundamental shift in perspective is needed. We must recognize that the Philippines doesn’t have *one* power system, but rather as many systems as there are islands. A decentralized approach, tailored to the unique needs of each community, is essential.
Policies designed for the main grid often falter when applied to these isolated areas. The competitive selection process for power supply, for example, struggles to function where there are few, if any, competing suppliers. Recognizing this, recent policy adjustments offer some exemptions, but may not go far enough.
Similarly, annual power supply procurement plans, while valuable for larger utilities, need to incorporate realistic timelines for potential grid connections – timelines that may never materialize for some communities. A more comprehensive plan is needed, one that moves beyond simply providing electricity.
More than two decades after the passage of the reform act, it’s clear that electrification alone isn’t enough. Sustainable growth in off-grid areas requires a holistic approach, breaking down silos between utilities, government agencies, and local communities. Extending power lines isn’t sufficient; we must also foster economic opportunities to ensure households can afford to keep the lights on.
Perhaps the answer lies in a new form of competition – one that bundles power supply with livelihood projects, attracting investment and creating sustainable economic activity. This could be spearheaded by regional development councils, mobilizing resources and stakeholders to transform “unviable” areas into thriving communities.
The path forward demands a recognition that progress isn’t linear. It requires acknowledging the unique challenges faced by isolated communities and embracing a decentralized, integrated approach to energy policy. Only then can we truly unlock the potential of every island in the archipelago.
