Businesses concerned over rising electricity rates
THE MARCOS administration should immediately address power supply shortages and high electricity rates, which are affecting businesses in the country, the Philippine Chamber of Commerce and Industry (PCCI) said.
In a statement, PCCI President George T. Barcelon said businesses are concerned over the continued increase in electricity rates and the power supply shortages especially during the summer months.
“But a more pressing concern is our power rate. Industries such as steel, cement and glass have expressed their apprehension to us over how much electricity rates are forecast to increase as supply for reliable baseload like coal, oil and liquefied natural gas (LNG) are becoming scarce commodity,” he said.
Global oil prices soared this year due to the Russia-Ukraine war and tight global supply. LNG prices have also recently jumped.
Mr. Barcelon noted that electricity rates in the Philippines are already much higher than other Southeast Asian countries.
“Studies have shown that electricity rates for residential, commercial and the industrial sectors in the Philippines have been significantly higher from between 25% to as high as 87% than its Association of Southeast Asian Nations (ASEAN) neighbors, namely Malaysia (87.5%), Indonesia (87.5%), Vietnam (50%) and Thailand (36%),” the PCCI said.
Only Japan and Singapore have higher power rates than the Philippines.
Mr. Barcelon said soaring power rates have affected manufacturing industries, who say that fuel and power costs account for 60% of their operational expenses.
The government should ensure that there is “reasonably priced” and steady power supply to be able to attract foreign investments that will create more jobs, the PCCI said.
“For legislation such as CREATE (Corporate Recovery and Tax Incentives for Enterprises) and the amendments to the Public Service Act and Foreign Investment Act to succeed in their intended results to bring back a dynamic production/manufacturing sector, we must effectively solve that ‘high cost of electricity’ impediment soonest, and ensure that there is enough supply to support businesses and industries,” PCCI Chairman for Energy and Power Jose S. Alejandro said.
Mr. Marcos had included energy as one of his administration’s main priorities, along with agriculture, digital infrastructure, and the “Build, Build, Build” program.
“This is a good platform to start taking actions to carve out recovery in new and better than light manufacturing industries for foreign and local investments,” PCCI Director for Energy and Power Franklin A. Carbon said.
The PCCI also urged the Marcos administration to consider renewable energy sources that have “higher proven and acknowledged availability, known technology, no subsidy requirement from either government or consumer to meet reasonable cost to consumers, and can deliver quality, reliable supply to industries.”
The business group also recommended the conservation, rehabilitation, and upgrade of hydropower, geothermal power, and LNG, and to accelerate the approval for new plants that can power industries at affordable costs.
“Addressing the country’s power woes is a big challenge that needs a concrete agenda, commitment and the concerted effort and support of all stakeholders,” the PCCI said.
Mr. Marcos has yet to announce his pick for Energy secretary. — RMDO
