Manila: Funds allocated to communities hosting energy resources and power-generating facilities will increase starting January 2026, aimed at ensuring greater development for the people and the economy while fostering inclusive growth and accelerating the universal electrification program.
According to Philippines News Agency, host communities currently receive PHP0.50 per kilowatt hour (kWh) under the Energy Regulation (ER) Program No. 1-94 (ER 1-94). Starting January next year, this allocation will rise to PHP2.50/kWh, as stated by the Department of Energy (DOE) in a press release issued on Wednesday. Energy Secretary Sharon Garin, in a Department Circular signed on October 14, 2025, noted that the financial benefit under the program will also increase from PHP0.01/kWh to PHP0.03/kWh of electricity generated and sold.
Garin emphasized a shift in approach, focusing on empowering communities and giving them a stake in the nation’s energy growth. She stated, “By reinvesting the benefits of power generation back into local areas, we are building shared prosperity and a stronger foundation for a sustainable future.” She further highlighted the investment in the “Filipino spirit,” underscoring the partnership built on trust and shared progress.
The DOE announced that the increased funding will support beneficiary-specific projects, including livelihood development, environmental protection, healthcare, and educational initiatives. Meanwhile, the PHP0.50 allocation for electrification projects through distribution utilities (DUs) will continue to fund efforts primarily aimed at connecting households in need of electricity service.
The policy also allows for the option to use the funds to lower electricity rates in host communities. This can be done voluntarily through a resolution by local government units (LGUs) or mandatorily when host LGUs and DUs are unable to utilize the funds for two years. The DOE provided estimates, noting that a 100-MW conventional power plant may facilitate ER 1-94 benefits of approximately PHP21 million per year, while a 100-MW solar power plant may generate benefits of around PHP5.5 million per year, assuming maximum capacity operation.
Financial allocations will be managed by the Development and Livelihood Fund (DLF), the Reforestation, Watershed Management, Health, and/or Environment Enhancement Fund (RWMHEEF), and the Electrification Fund to ensure proper management and transparency. As of December 2024, the ER 1-94 Program had empowered 683 LGUs, including 321 barangays, 286 municipalities and cities, and 76 provinces. With the tripled allocation, the DOE projects a threefold increase in community investments, leading to improved facilities, more livelihood opportunities, and stronger local economies.
