CeMAP bats for international level playing field in energy

MANILA, Philippines - The Cement Manufacturers Association of the Philippines (CeMAP) called on government regulators to help create an international level playing field in the energy area to spur industrial growth. Measures must be taken to cut energy cost and compensate for the high subsidies that  other countries get in power while the Philippines does not.

CeMAP cited a study by the International Energy Consultants (IEC) which showed that electricity rates in the Philippines are “significantly higher” compared to other Asian countries.

The IEC study indicated that the kilowatt-hour rate in the Philippines is $0.199 against $0.111 in Malaysia, $0.105 in Thailand, $0.089 in Korea, $0.087 in Taiwan, and $0.085 in Indonesia. Subsidies from these countries range from $0.061/kwh to $0.101/kwh, or 30 percent to 50 percent of Philippine electricity cost.

CeMAP cited the high cost of power in the country that challenges the viability of certain industries. Notable are strategic sectors such as the cement industry, which is considered a key ally of DPWH and the private sector in infrastructure development. “As rice is strategic to food, cement is strategic to infrastructure,” CeMAP president Ernesto Ordoñez said.

Domestic cement producers look at the high cost of power, estimated at 64 percent of cement production cost. This is a difficulty CeMAP says it must face.

To address this power issue, the Department of Energy disclosed that a study on the power rate matrix in Asia is underway. This is funded by the USAID and implemented by the state-run University of the Philippines.

The research will be conducted for 10 months using as benchmark the Philippine 2011 power rates.

“Although our industry has attained efficient operations supported by sustainable technology, we are severely challenged by the competition from foreign countries enjoying power subsidies while we have none. We recommend government take swift action to cut energy cost and promote an international level playing field in this important area,” Ordoñez said.