business mirror
THE Aquino administration has assured investors in power-generation projects it will continue to give them incentives, especially with the cost and availability of power always figuring in the country’s competitiveness woes.
Trade Secretary Gregory L. Domingo said the government is aware that incentives play a big part in attracting investments in the power sector, especially if no government guarantee is offered.
“Incentives are a big factor in power; it affects their [investors] rates of return,” Domingo said.
Domingo gave this assurance even with the Department of Finance (DOF) again harping on significant cuts in the grant of fiscal perks, particularly income-tax holidays (ITH), as the government needs to address its budgetary problems.
Domingo said the power situation in the Philippines affects the competitiveness of the country in attracting investors since power cost is a big component for businesses, particularly in manufacturing.
He said the Philippines’ uncompetitive electricity cost, reportedly the second highest in Asia, is becoming more glaring in the eyes of foreign investors as “other countries have additional things that they can offer that we can’t.”
This, Domingo said, is why the giant chip maker Intel decided to move its manufacturing facility here to Vietnam.
“The good news is some power projects from the United States are coming in, and a number of power projects are in the pipeline. If all will materialize, this will stabilize the situation in the next few years,” Domingo said.
He said the Department of Energy is working very hard to address the power problem, “and based on what I know before and what I know now, I am much more comfortable that this power situation will be resolved.”
Power is not part of the six priority sectors identified by the government: mining, tourism, electronics, business-process outsourcing, housing and agribusiness. But Domingo said the availability and cost of power are part of the overall business environment that the country wants to improve, including infrastructure, governance and peace and order.
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