Output-Based Aid in the Philippines: Improving Electricity Supply on Remote Islands

The Philippines has introduced an output-based aid (OBA) subsidy scheme to improve electricity supply on remote islands as a way to enhance living standards in the poor communities there. The subsidy, to come from a national fund financed by a surcharge on all electricity users, will be paid to private generators selected through competitive bidding, and disbursed on the basis of the energy they supply.