Economists urge PNoy to address Mindanao’s power, infra problems

MANILA, Philippines - Economists called on President Aquino to address pressing issues in Mindanao including the power crisis, saying that the economy needs more than a credit rating upgrade to move forward.

“Overall, the upgrade is a necessary but not sufficient condition for higher private investment. Much remains to be done by the government,” said economist and University of the Philippines professor Benjamin Diokno.

He said that to help spur growth in Mindanao, the government must address key issues such as stabilizing power supply in the region.

Diokno, a former budget and management secretary, said the Fitch Rating upgrade would not necessarily translate to more investments unless real issues are also addressed.

These include public infrastructure, revenue-generating capacity, peace and order and policy consistency.

“Mindanao as an investment destination has added wrinkles. Power supply adequacy and reliability and peace and order problems are quite severe,” he said.

At present, Mindanao is suffering from seven to nine hours of rotating power failures daily.

The problem is not likely to end soon after the National Power Corp. (Napocor) warned that the water level of Lake Danao would continue to decline this summer.

“These problems cannot be solved overnight. But they should be addressed with a great sense of urgency,” Diokno said.

Ateneo de Manila professor and former Socio-economic Planning Secretary Cielito Habito has also said that he does not expect much foreign direct investments going to Mindanao despite the upgrade except in the palm oil sectors because of perennial concerns such as poor infrastructure and high power costs.

Gerardo Sicat, another renowned economist, said the government could better reap the benefits of a credit rating upgrade from Fitch or other debt watchers if the government implements long-term actions in Mindanao.

“The signs had been known by all concerned for years, especially by the national government,” Sicat said.

Energy Secretary Carlos Jericho Petilla said the power crisis in Mindanao is expected to continue until 2015 when additional power supply comes.