THE call by the Philippine Chamber of Commerce and Industry (PCCI) for the Aquino administration to “urgently review and adopt measures and possible alternatives in response to a looming power crisis” deserves priority attention in the slew of issues that the various industry groups are now tackling as part of a road map for submission to Malacañang.
The concerns over energy—not just the shortfalls in capacity, but also the mix, the cost issues, the coherence of various, simultaneous actions—should, in fact, get top priority among all others because they strike at the very core of business, i.e., what business is there to talk about if there’s no energy to power it with?
The power issues are crucial, especially because they are being raised barely a week after a triumphant President Aquino announced, on his return from his trip to the United States, that at least $2.4 billion in solid investments had been sealed in the course of meetings with the captains of US industry, besides the $400-million Millennium Challenge Corp. grant.
Coca-Cola, for example, announced it was expanding its business in the country, auguring well for an economy that for far too long had been struggling to catch up with its neighbors in terms of foreign direct investments (FDI)—the more sustainable basis for growth and development, not to mention the real generator of jobs.
FDI are also the best hope for reducing an inordinate reliance on our having to export millions of workers to labor markets as diverse as Texas to Tanzania.
The hopes that this new administration can capitalize on its popularity to continue perking up the markets and luring more investments, especially in the countryside, can soon evaporate, however, if the investors soon realize that we are at risk of returning to those dark days of the early 1990s when business and industry reeled from the impact of 8- to 12-hour daily brownouts.
An energy crisis, part 2, at this time will be even more ironic, considering that the past few years, the government has made much of its efforts to privatize the National Power Corp., to set up an efficient, credible spot market for electricity, and encourage alternative sources to lessen dependence on fossil fuels—the latter being hindered by a still-incoherent policy on biofuels and renewable energy, notwithstanding the passage of relevant legislation.
This is how the PCCI dished out its warning at the weekend: “As the country faces the power-sector challenges in the next two years as related by current leaderships in various forms and statements, the…PCCI is calling on all stakeholders to begin seriously identifying alternative and contingency measures, while calling on government to review the regulatory framework, the current true and correct market/supply structure, the effectiveness of applicable current legislation and seats of responsibilities in order to clear the deck and set the stage that will encourage more private-sector investments in the power-generation sector.”
Estimates by the Department of Energy (DOE), according to a news report on the front page of this issue, show total power demand is growing annually at 4.3 percent in Luzon and 4.6 percent in the Visayas and Mindanao.
To meet the growing demand, the DOE said Luzon should have additional installed capacity of 11,900 megawatts (MW); Visayas, 2,150 MW; and Mindanao, 2,500 MW between now and 2030.
“There are big players willing to invest in power-generation plants, but they are not assured of viable buyers and decent returns. The government should consider implementing measures to enhance the technical and financial capability of electric cooperatives to increase their capacity to enter into tenders and off-take arrangements,” Dr. Francis Chua, PCCI president, said.
His colleague in the PCCI’s energy committee, Jose Alejandro, believes the rehabilitation and upgrading of privatized power plants, including independent power producers, should be accelerated to produce 300 MW to 600 MW, and bridge foreseen shortfall in 2011, 2012 and part of 2013 for Luzon.
These next three years are crucial for laying down the basis for growth through the vital infrastructure and energy capacity. The new administration has done right in reviewing big-ticket contracts and transactions carried over from the past administration, a matter that the President highlighted in his “First 100 Days” report. Having done that—and saved, as he put it, billions of pesos as a result—it should now move forward, and quickly, and fill in the gaps that could spell success or failure for its growth and development plan in the next six years.
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