Business sector urges gov’t to prioritize power issue

MANILA, Philippines - The business community is urging the government to act “with a sense of urgency” on the power issue and cooperate with the private sector on a clear program to ease the energy shortage that threatens the country’s economic momentum.

In a position paper, the top leaders of foreign and local trade associations warned that the power supply deficiency and uncompetitive electricity rates are two of the biggest obstacles to the country’s sustained growth.

These problems, they continued, have been compounded by the sudden power rate hike in December, “which brought our electricity prices to being the highest in the world,” as well as the recent Mindanao-wide power outage.

To meet regional economic growth targets, Luzon now needs 600 megawatts of power and 300 MW more for each succeeding year, while Visayas needs 150 MW today and some 150 MW more per annum. The Mindanao region, meanwhile, is short 300 MW today and requires an additional 120 MW annually.

The trade groups lamented the seeming lack of specific details on when new supply sources would become available, “other than those various ‘commitments’ being undertaken on a best-effort basis.”

Uncertainty also exists on whether capacities projected to come on line in 2014 could still do so this year, and even then, these projections fall short of actual need. “The problem will be most glaring in Mindanao, where the earliest foreseeable time when new significant capacity can come in is not until 2015,” the paper said.

There is also no clear program for achieving reasonable and competitive power rates, it continued. “It seems we are merely assuming that the entry of competition would suffice to solve our problems.”

The executives said President Aquino has their full support to formulate and implement “executive actions and programs addressing these issues with a sense of urgency and without need to amend RA 9136 or the Electric Power Industry Reform Act (EPIRA).”

They pointed out that amending the EPIRA would only cause uncertainties and slow down new investments and projects in the power generation sector and “further delay the gains that the EPIRA was envisioned to bring.”

The business officials presented a set of recommendations for the public and private sector to confront together “these daunting challenges of achieving power supply security and reasonable and competitive power prices.”

For one, power supply security and competitive power rates must be recognized as major twin initiatives to realize aggressive industrialization and inclusiveness. “The leadership must give utmost attention to both public and private sector cooperation to achieve these objectives,” they said.

For another, the entire Economic Cluster “should evaluate the situation and strategize on how to achieve these goals and be accountable for the results. DOE should not be left alone to figure out the solutions.”

The groups also pushed for a “broader perspective and mindset” by looking at the successful power sector strategies of the country’s regional competitors.

They also batted for fair competition as “a necessary condition to achieve our goals,” and to essentially leave the EPIRA alone. “There are enough provisions in the EPIRA which the Executive Department can use to improve processes and policies. Amending the EPIRA is therefore unnecessary.”

They further stressed: “Our power issues must be addressed with a strong sense of urgency, and the private sector is ready to provide its full support.” They suggested creating a public-private task force to spearhead the efficient implementation of the program and overcome resistance from local government units and civil sectors.

The letter was signed by the heads of the Philippine, American, European, and Korean chambers of commerce in the Philippines, Alyansa Agrikultura, Employers Confederation of the Philippines, Philippine Exporters Confederation, Inc. and Chamber of Mines of the Philippines.