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Welfare impacts of electricity generation sector reform in the Philippines. (Research Notes).

Empirical investigation into the welfare impacts of an introduction of private sector participation via Independent Power Producers' (IPPs) into the Philippines electricity generation sector concludes that the sector reform and private sector participation have increased social welfare. The study adapted a methodology of social cost and benefit analysis in a partial equilibrium model, a case study approach that constructs a counterfactual scenario. The counterfactual scenario was carefully built to be able to compare only the difference resulting from ownership effects, that is, comparing the actual scenario under the reform involving private sector participation with the counterfactual scenario under the comparable reform without private sector participation. The main benefits came from the IPPs' contribution to resolving the power crisis during 1990-93 and hence to promoting economic and social development, which otherwise would have been lost and hard to recover, by mobilizing funding and delivering faster , and being more efficient than government owned enterprises. The net benefit equivalent to a net present value of US$10.4 billion (in 1999 prices) was distributed to consumers as big gainers and both domestic and foreign investors as gainers, while government was a loser and there was a significant air pollution cost. (JEL 010, D61, L50, L10, L94)

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Comment:Welfare impacts of electricity generation sector reform in the Philippines. (Research Notes).
Author:Toba, Natsuko
Publication:International Advances in Economic Research
Geographic Code:9PHIL
Date:May 1, 2003
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