Lessons Learned: Fossil Fuel Subsidies and Energy Sector Reform in the Philippines

The Philippines has removed the majority of all consumer energy subsidies, successfully phasing out most price subsidies in the downstream oil and electricity sectors in the late 1990s and resisting intermittent demands for their reintroduction.

This detailed case study looks into some of the factors that enabled such durable reforms. This includes slowly transitioning towards higher prices and the use of somewhat targeted subsidies and transfers to provide support for the country's most vulnerable consumers. The Philippines' government has also engaged in proactive efforts to articulate the rationale for price changes, monitor the deregulated market and repeatedly investigate the costs and benefits of reform through a series of high-level independent panels.

This report was originally prepared as a internal background paper to the Global Subsidies Initiative’s (GSI’s) publication A Guidebook to Fossil-fuel Subsidy Reform for Policy-Makers in Southeast Asia.