Senior-citizen power subsidy costs seen rising as elderly ranks grow

THE government’s electricity discount program for senior citizens is facing challenges due to the ageing population and overlaps with other energy subsidies, the Philippine Institute for Development Studies (PIDS) said.

“As the Philippine population ages, both the number of qualifying households and their average consumption levels will increase, escalating total subsidy costs,” PIDS study authors Kris A. Francisco and Patricia Thea A. Basilio said in a report published on Dec. 21.

Republic Act 9994 provides for a minimum 5% electricity discount for citizens aged 60 and above who consume 100 kilowatt hours or less.

PIDS added that the demographic profile will likely increase the burden on non-senior consumers over time and affect government finances.

“The combination of expanding beneficiary populations consuming higher electricity volumes creates compounding fiscal effects,” it said.

According to a working paper from the Asian Development Bank, the elderly are expected to account for one-fifth of the Philippine population by 2066.

PIDS also said the program’s annual renewal process increases the administrative burden, putting pressure on staffing costs.

“These recurring costs require sustained manpower and resource allocation, which generates higher operational expenses that is ultimately incorporated into regulated tariffs and passed on to all consumers,” it added.

In addition, senior citizen discount beneficiaries overlap with Lifeline Rate recipients, who receive discounted electricity as low-income or marginalized consumers.

About 31% of Lifeline-qualifying households overlap with the senior citizen program, it said.

“This overlap means certain households receive dual subsidies, lifeline discounts plus senior citizen benefits, while administrative systems process separate applications and verifications for overlapping populations,” the government think tank said. — Aubrey Rose A. Inosante