Electric Cooperatives: Powering Philippine Communities

what is electric cooperative in the philippines

The Philippines has 119 electric cooperatives, also known as ECs, that provide electricity to over 56 million people in 36,000 rural villages and towns. The electric cooperatives in the Philippines were established with the help of NRECA International, which conducted a feasibility study and provided funding for the initial electrification program in the country. The National Electrification Administration (NEA) was created in 1969 to manage the electric cooperatives and to declare as a national policy the total electrification of the Philippines. The NEA works with its partners, the electric cooperatives, to provide quality financial, institutional, and technical services to the ECs and promote competence enhancement. The Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA) is the national organization that advocates for and empowers the electric cooperatives in the country.

Characteristics Values
Number of electric cooperatives 119
Number of service connections 11 million+
People reached 56 million+
Villages and towns reached 36,000+
Year of creation 1969
Founding Act Republic Act 6038
Percentage of electrified homes in 1969 22.9%
Percentage of electrified rural homes in 1969 5.8%
Funding for rural electrification program in 2025 P3.6 billion
Number of electric cooperatives with stock in REFC 84

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The National Electrification Administration (NEA)

The NEA's efforts to electrify rural areas in the Philippines began with the establishment of two Rural Electric Cooperatives (ECs): the Misamis Oriental Rural Electric Service Cooperative, Inc. (MORESCO) and the Victorias-Manapla-Cadiz Rural Electric Service Cooperative, Inc. (VRESCO). These ECs served as models for future cooperatives and played a crucial role in the country's electrification journey.

The NEA is governed by a Board of Administrators (BOA) composed of a Chairman and four members, one of whom is the Administrator, who also serves as the CEO of NEA. The BOA is responsible for administering the provisions found in Chapter IV of the NEA decree.

The NEA has been instrumental in bringing electricity to millions of people in the Philippines. In 2015, the country's 119 electric cooperatives had over 11 million total service connections. The NEA continues to work towards sustainable energy access for off-grid communities and has committed to allocating funds for rural electrification, with a focus on Geographically Isolated and Disadvantaged Areas (GIDA).

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Electric cooperatives (ECs)

The Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA) is the national organisation that represents all ECs and EC Allied Organisations in the country. It advocates for the empowerment of ECs and ensures the quality, reliability, and global competitiveness of their services. PHILRECA also provides support and assistance to its members by spearheading policy developments, representing them to the government and energy agencies, facilitating capacity-building trainings and strengthening relations with energy stakeholders.

The NEA works closely with ECs, providing quality financial, institutional, and technical services to promote competence enhancement in a deregulated environment. It also provides funding for rural electrification programs, with a focus on Geographically Isolated and Disadvantaged Areas (GIDA). In 2004, the Rural Electrification Finance Corporation (REFC) was formed to provide ECs with a private, cooperative-owned financing mechanism to introduce improved technology and finance key investments.

ECs have proven to be resilient and able to bounce back from natural disasters. For example, in 2013, Typhoon Haiyan heavily damaged 33 electric co-ops and completely destroyed 11, but they were able to quickly rebuild and assist in relief efforts.

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Rural Electrification Finance Corporation (REFC)

Electric cooperatives (ECs) in the Philippines are part of the country's restructured electric power industry. They are spread throughout the archipelago, bringing electricity to millions of people in rural villages and towns. The National Electrification Administration (NEA) has 119 electric co-ops that provide electricity to more than 56 million people in 36,000 rural villages and towns.

The Rural Electrification Finance Corporation (REFC) was formed in 2000 to support the electric cooperatives in the Philippines by providing them with a private, cooperative-owned financing mechanism. REFC aims to provide ECs with financial services and loan services to meet their financial needs. This includes supplemental loans at the lowest possible lending rate, enabling ECs to provide adequate, dependable, and high-quality service.

REFC also established the Rural Electrification Trading Corporation (RETC) to expand loan packages to ECs through technology-driven and cost-effective materials, equipment, consulting, and other services. REFC and RETC aim to become preferred service providers for ECs, ensuring their financial and related needs are met.

REFC offers a range of loan services to Electric Cooperatives, including refinancing services, vehicle fleet program loans, and term loans. The refinancing service helps cooperatives optimize their financial obligations by consolidating existing loans into a single, more manageable repayment structure with competitive rates and flexible terms. The vehicle fleet program loan supports cooperatives in expanding and optimizing their transportation capabilities, while the term loan provides structured financing tailored to their specific needs.

In summary, the Rural Electrification Finance Corporation (REFC) plays a crucial role in supporting the electric cooperatives of the Philippines by providing financial services and loans to meet their diverse needs. Through its services, REFC empowers ECs to enhance their efficiency, reduce costs, and provide dependable electricity to millions of people in rural areas.

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Philippine Rural Electric Cooperatives Association (PHILRECA)

The Philippine Rural Electric Cooperatives Association, or PHILRECA, is the national organisation of all the Electric Cooperatives (EC) in the Philippines. It is committed to protecting the rights and interests of ECs, their member-consumer-owners (MCOs), and EC Allied Organisations. PHILRECA has been advocating for over four decades to empower Electric Cooperatives as they work towards rural electrification.

The Association supports its members by leading policy development for the EC sector, representing them to the government and other energy agencies, and facilitating capacity-building training, webinars, and conventions. PHILRECA also works to strengthen its members' relationships with energy stakeholders.

The organisation participated in the 2019 Philippine elections, securing a single seat in the House of Representatives, filled by PHILRECA's President Presley De Jesus. PHILRECA's political organisation, the Philreca Party-List, represents the interests of its member electricity cooperatives and consumers. It advocates for the sustainability of the rural electrification program, lowering electricity prices, and improving electricity distribution and service.

PHILRECA has been instrumental in the Philippines' electric co-op movement, which has brought electricity to over 56 million people in 36,000 rural villages and towns. In 2015, the country's 119 electric co-ops exceeded 11 million total service connections, a significant milestone.

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Rural Electrification Program

The Philippines' Rural Electrification Program (REP) has been instrumental in bringing electricity to millions of people in the country's rural villages and towns. The program is overseen by the National Electrification Administration (NEA), which was established with the support of NRECA International and funded by the U.S. Agency for International Development (USAID). The NEA's network of 119 electric cooperatives, or ECs, has been crucial in delivering electricity to remote communities across the Philippines' many islands.

Under the REP, the NEA provides financial, institutional, and technical assistance to ECs to enhance their operations. This includes support in revenue generation, service reliability, and operational efficiency. The NEA also enables ECs to acquire, own, and maintain generating facilities within their franchise areas, contributing to greater efficiency and lower generation costs. The program encourages private sector involvement, with alternative financing options such as supplemental loans and equity capital leveraging.

The REP has had a significant impact on rural communities in the Philippines. As of 2019, the program had facilitated 15 million connections, providing electricity to approximately 45 million people. This has resulted in the development of small and medium enterprises and improved the lives of the rural population. Additionally, the REP's Sitios (Sites) Electrification Program has electrified a large number of sitios, which are remote communities, enhancing access to energy infrastructure in these isolated areas.

The NEA's focus on rural electrification aligns with the government's belief in the transformative power of electric services. The Department of Energy (DOE) launched the Accelerated Barangay Electrification Program (ABEP) in 1999, aiming to increase access to electricity for unserved communities. This was followed by the Expanded Rural Electrification Program (ER Program) in 2003, which targeted the electrification of sitios and households, building upon the foundation laid by the REP.

Frequently asked questions

The National Electrification Administration is a Filipino government-owned corporation that works with electric cooperatives (ECs) to provide financial, institutional, and technical services. The NEA was created in 1969 with the goal of total electrification of the Philippines.

Electric cooperatives are tasked with providing adequate, reliable, and low-cost electricity to rural areas. They are non-profit organisations that are given primacy due to their cooperative character and heavy financial burdens.

There are 119 electric cooperatives in the Philippines, spread throughout the archipelago.

PHILRECA is the national organisation of all Electric Cooperatives and EC Allied Organisations in the Philippines. It advocates for the empowerment of Electric Cooperatives and ensures quality, reliability, and global competitiveness.

NRECA International is a long-term partner to the electric cooperatives in the Philippines. It provides support and assistance, including governance training, sharing best practices, and financial assistance in the event of natural disasters.

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