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Competition Considerations in Change Ownership Reforms for Electric Cooperatives

Author

Listed:
  • Carlos L. Vega

    (University of East Anglia, School of Economics)

  • Jestoni A. Olivo

    (Economics Office, Philippine Competition Commission)

  • Antonio Miguel S. Ventura

    (Economics Office, Philippine Competition Commission)

  • Eirene Gillian M. Reyes

    (University of the Philippines College of Law)

Abstract

Change ownership reforms for electric cooperatives (ECs) have once again attracted policymakers’ interest due to current efforts in expediting their privatization. This note serves as input to this ongoing conversation using the lens of competition. We argue that unchecked consolidation - especially vertical integration along the power supply chain from generation to distribution - may cause more pernicious effects on the industry and welfare than existing inefficiencies of ECs. Consistent with Canlas & Jandoc (2025), we support a franchise competition regime where the threat of displacement may foster an overall competitive behavior among existing and potential players. The necessary conditions for and the challenges to implementing an effective competition for the market framework are determined.

Suggested Citation

  • Carlos L. Vega & Jestoni A. Olivo & Antonio Miguel S. Ventura & Eirene Gillian M. Reyes, 2025. "Competition Considerations in Change Ownership Reforms for Electric Cooperatives," UP School of Economics Discussion Papers 202504, University of the Philippines School of Economics.
    • Handle: RePEc:phs:dpaper:202504
    as

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    File URL: https://pre.econ.upd.edu.ph/upsedp/index.php/dp/article/view/1563
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    References listed on IDEAS

    as
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    3. Escresa, Laarni C. & Glova, Adrian Matthew G., 2024. "Politico-economic determinants of the performance of electric cooperatives in the Philippines," Utilities Policy, Elsevier, vol. 91(C).
    4. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    5. Navarro, Adoracion M. & Camara,JethroEl L., 2023. "Mapping the Energy Sector Issues in the Philippines," Discussion Papers DP 2023-50, Philippine Institute for Development Studies.
    6. Jean-Jacques Laffont & Jean Tirole, 1991. "The Politics of Government Decision-Making: A Theory of Regulatory Capture," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1089-1127.
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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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