The Department of Budget and Management (DBM) announced the release of P1.166 billion to the Power Sector Assets and Liabilities Management (Psalm) with regards to the extension of its memorandum of agreement (MoA) with the Manila Electric Co. (Meralco).
The said release will support the MoA’s funding requirements for Ecozone Special or Preferred Rates for Philippine Economic Zone Authority (Peza) export manufacturing companies.
“The P1.16-billion release is in fulfillment of President Aquino’s order to provide budgetary support for the MoA extension. By extending this assistance, the administration will not only help key Peza industries that are already established in the country. The energy subsidy will likewise encourage the influx of foreign investments and boost the Philippines’ competitiveness vis-a-vis its neighbors,” Budget Secretary Florencio Abad said.
Meanwhile, Aquino approved the extension of the MoA between the NPC and Psalm with the push of the agreement’s validity until Dec. 25, 2012 or until the effective implementation of the Retail Competition and Open Access whichever comes first.
Abad said the DBM already issued a Special Allotment Release Order (Saro) with an amount of P1.16 billion, in reference to the president’s condition that the payment of the electric subsidies will be made by Psalm on a monthly basis. With the total release, the Psalm has received a Notice of Cash Allocations (NCAs) which is worth P453.7 million covering the billing requirements for January to April 2012.
For January to February, the DBM already released worth P175 million while the another P156. 2 million will be used for the February-March billing and the power subsidy for March to April will amount to P122.5 million. The secretary confirmed that the released funds will be charged against the Department of Energy’s Special Account in the General Fund (SAGF) 151-Malampaya fund, as approved by President Aquino on May 21.
And as of March 31, funds that are under the Department of Energy status of special account stood at P137.3 billion and the energy subsidies required by the MoA extension now brings the current balance to P97 billion.
“Through these measures, the Aquino administration intends to usher in more investment activity in the country. Electricity rates in the Philippines are already the highest in Asia, and we want to mitigate the cost of doing business here so that the country becomes more attractive to foreign investors. With more businesses setting up shops in the Philippines, the government will be better positioned to open up more employment opportunities for Filipinos, and ultimately, stimulate long-term economic growth,” Abad said. –Aileen Lor Tuesday, Daily Tribune
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