PCCI calls for concrete plan to avert power crisis

Published by rudy Date posted on March 31, 2014

MANILA, Philippines – The Philippine Chamber of Commerce and Industry (PCCI) warned that the power supply situation in the Philippines is now at a “critical stage” and called for a well- planned domestic strategy to avert the fast-approaching crisis.

In a statement, the PCCI said the national power supply shortage has reached critical status, and that the “crisis is imminent in the very near future if no strong actions are taken soonest.”

The shortfall arises from the absence of a concrete, well-coordinated national plan on power plant development and private-public effort to communicate the plan to communities that will be affected by the construction projects, it further said.

To meet rising power demand, Luzon needs an additional supply of 600 megawatts now and 300 MW more every year, but “only some 145 MW may be expected in 2015,” PCCI said.

The Visayas needs 150 MW of additional power at present and some 150 MW more every year, while Mindanao is short of 300 MW today and requires some 100 MW more each year.

In both regions, “there is no definitive/concrete power development plan” to cope with the rise in demand based on a projected seven-percent economic growth, the trade association said.

If we want to develop the heavy manufacturing industry sector and bring in greater foreign direct investments (FDIs), we should designate power supply sustainability, quality, and reliability (SQR) as a major part of our national strategy for industrialization and inclusive growth, the PCCI said.

Specifically, a solidly planned blueprint should be crafted specifying the location, size, and type of power plants to be built. The plan will cover a minimum period of five years in advance and be supported by an annual review and updating program.

This should be complemented by a joint public-private effort to explain to the public the need to support its implementation, the group said.

At the same time, the supply challenge needs to be faced not just by the Department of Energy but together with other relevant government agencies as “a coordinated group and speaking in one voice.”

These agencies include the National Economic and Development Authority, Department of Finance, and Department of Trade and Industry.

The government must also look at how to bring down the local price of energy, already the highest in Asia and among the 10 highest in the world, according to PCCI. One way is to consider subsidizing the cost of power the way other countries do.

Power cost subsidies can generate FDIs and spur industrialization, it said, pointing to the case of Indonesia, which from 2000 to 2012 saw FDI inflows average $6.2 billion per year. For the same period, similarly subsidized Malaysia registered annual FDIs of $5.8 billion, Thailand $7.2 billion, and Vietnam $4.5 billion. Philippine FDIs for the period reached just $1.5 billion each year on average.

The organization likewise recommended the revamp or suspension of the Wholesale Electricity Spot Market, removal of burdensome tariffs such as the value-added tax on franchise tax and incremental currency exchange rate adjustment, and use of solar power to light buildings and conserve power. –Philexport (The Philippine Star)

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