Mandated discounts and subsidies

The EPIRA law requires that those they call the “lifeliners” who consume 100kwh or less of electricity are given discounts ranging from 20% to 50% by the distribution utilities like Visayan Electric and Meralco.

The same EPIRA law allows the utilities to promptly recover the cost of the discounts by collecting from consumers using more than 100 kwh a charge listed in our electric bills as “lifeline rate subsidy”. It is therefore a discount at no cost to the utilities.

Now, look at this daily scene.

The government through the LTFRB requires the jeepney drivers to give a 20% fare discount to senior citizens and students, which compose half of their passengers on a school day. But in contrast to the good fortune of the owners of the giant utilities in their air-conditioned rooms, the hard-driving jeepney drivers who daily brave the dust and the heat of Manila’s streets are made to absorb the cost of the discounts. The drivers effectively give subsidy to the students and the senior citizens, and the drivers are not rich men..