As the country transitions towards recovery and focuses on attracting investments in heavy industries, the Philippine Chamber of Commerce and Industry (PCCI) is calling on the government of President Ferdinand R. Marcos, Jr. to define his administration’s agenda on energy supply security and affordable power cost.
“Power supply shortage has become a regular occurrence especially during the summer months when the output of our hydroelectric power plants decrease significantly. But a more pressing concern is our power rate. Industries such as steel, cement and glass have expressed their apprehension to us over how much electricity rates are forecasted to increase as supply for reliable baseload like coal, oil and LNG are becoming scarce commodity,” PCCI President George Barcelon stated.
Studies have shown that electricity rates for residential, commercial and the industrial sectors in the Philippines have been significantly higher from between 25% to as high as 87% than its ASEAN neighbors, namely, Malaysia (87.5%), Indonesia (87.5%), Vietnam (50%) and Thailand (36%).
“Electricity paid for by consumers in Japan and Singapore are higher than ours but their economies are way ahead” Barcelon added.
This impacts heavily on manufacturing industries who have reported that energy (fuel and power) comprise 60% of their operations costs.
Sustaining recovery from the pandemic and building on reform measures intended to attract foreign direct investments in jobs-creating industries demand the assurance of a reasonably-priced and steady power supply capable of meeting production needs.
“For legislations such as CREATE and the amendments to the Public Service Act and Foreign Investments Act to succeed in their intended results to bring back a dynamic production/manufacturing sector, we must effectively solve that ‘high cost of electricity’ impediment soonest, and ensure that there is enough supply to support businesses and industries. Foreign investors must be assured of landing safely on a sustained power supply and competitive power rate,” PCCI Chairman for Energy and Power, Jose Alejandro stressed.
PCCI lauded the pronouncement of President Marcos setting energy as a priority alongside agriculture, digital infrastructure and the Build. Build. Build.
Frank Carbon, PCCI Director for Energy and Power, said, “This is a good platform to start taking actions to carve out recovery in new and better than light manufacturing industries for foreign and local investments.”
Noting President Marcos Jr.s’ plan to focus on Renewable Energy, PCCI urged government to consider those that have higher proven and acknowledged availability, known technology, no subsidy requirement from either government or consumer to meet reasonable cost to consumers, and can deliver quality, reliable supply to industries.
PCCI likewise recommended the conservation, rehabilitation and upgrading of the energy resource that are qualified and effectively positioned such as hydro and geothermal power and LNG, and to expedite the approval process for new power plants that fit the program of powering industries at affordable level.
PCCI acknowledged that addressing the country’s power woes is a big challenge that need a concrete agenda, commitment and the concerted effort and support of all stakeholders.