PHL unprepared to catch next ‘investment wave,’ says expert

THE Philippines is not ready to absorb the next “investment wave” coming its way, a power and water resource expert said.

Nevertheless, the Aquino administration, with four years left before the end of its term, could start enhancing the country’s “absorptive capacity” that will push forward industrialization, according to Alan Ortiz, president and chief operating officer of San Miguel Global Power Holdings Corp.

Investors, Ortiz said, are starting to look at prospects of setting shop in the Philippines.

Speaking during a forum organized by Center for Philippine Futuristics Studies and Management Inc. at the Asian Institute of Management in Makati City on Tuesday, Ortiz added that power and water are two of the basic material requirements of society.

Ortiz, a former consultant to the Energy Development Corp. (EC), said the government needs to establish the amount of energy resources that the country actually controls and start working to enhance its power-production capacity in order to meet the requirements of revitalizing industries, particularly the manufacturing sector.

Ortiz added that the government should also invest and maximize public-private partnerships (PPPs) to sustain the growth of the power sector.

“The government should really focus on enhancing power supply,” he told the BusinessMirror in an interview.

It should zero in on hydroelectric power, whose vast potential for meeting the country’s energy needs, Ortiz said, is untapped. Luzon and Mindanao, he added, can generate as much as 4,000 megawatts of electricity through hydropower, while the Visayas can chip in with as much as 1,000 MW megawatts of electricity.

The government, according to Ortiz, should pursue the establishment of coal-fired power plants to boost power generation, which is currently pegged at 16,000 MW.

In March 2011, he said, the Department of Energy declared that the country needed to raise its installed capacity to 30,000 MW by 2025.

The cost of electricity in the Philippines remains high compared to other countries because it has less electricity to speak of, Ortiz added.

Unlike the Philippines, he said South Korea, Thailand, Indonesia and Vietnam are prepared to absorb the next “investment wave.”

“The government should continue public-private collaboration in power development,” he said. It should set up a multilateral equity fund to finance PPP power and water projects and pursue and develop all affordable renewable resources. The government, Ortiz added, should make a priority the building of hydropower plants in Luzon, the Visayas and Mindanao.

Hydropower, he said, is renewable, affordable and could serve a number of purposes. In Luzon, about 5 to 8 billion liters of water flow into the Pacific every day, Ortiz added.

“One hydropower plant can provide bulk water, power and irrigation, all at the same time,” he said.

Ortiz proposed a policy framework for water or a law that will create a National Water Development Corp. to plan, implement and oversee water development projects throughout the country. The corporation, he said, will then create an independent Water Regulatory Commission to establish, adjudicate and enforce all water-related regulations nationwide; and establish the needed legal framework that will allow, support and protect private-sector investments in the water sector, allowing for public-private collaboration in water-supply development and ensuring water security. –JONATHAN L. MAYUGA / REPORTER, Businessmirror