EDITORIAL - Power crisis

With the country now rated investment grade, it should be easier for the government to lure more job-generating foreign direct investments. Mindanao in particular can use more investments both foreign and local. The southern part of the country is home to some of the poorest provinces and conflict areas. Jobs and livelihood opportunities not only will ease poverty but also improve the peace and order situation.

Armed conflict in Mindanao is confined to only a small area, and there are many provinces that can be considered sound investment destinations. Investors, however, are deterred from the entire Mindanao because of another problem: a power crisis that the government has admitted will ease, at best, only in 2015.

The nation saw an exodus of investors when a crippling power crisis hit Metro Manila and other parts of Luzon from 1991 to 1992, with daily blackouts lasting an average of eight hours. On bad days, the outages lasted up to 15 hours. Experts have warned that with little generation capacity being added since then, a similar crisis may hit Metro Manila again. For now, however, the crisis is already being felt in Mindanao, retarding development and economic growth in a region rich in resources.

Investors have long complained that Philippine power costs are the second highest in the region after Japan. The high power rates should at least be offset by a reliable supply, but this is not the case. And at this point the supply is most unreliable in Mindanao. The government will have to do more to improve Mindanao’s electricity supply. Mindanao needs investments, starting with new ones in power generation.