A group of businessmen on Friday called on energy stakeholders to help address the high cost of electricity, which has served as an obstacle to more investment in the country. Meneleo Carlos Jr., chairman emeritus of the Federation of Philippine Industries (FPI), said they are having a hard time convincing foreign firms to invest in the country because of high electricity rates.
Carlos aired the appeal during the Natural Gas Summit in Makati City attended by stakeholders in the natural gas industry, Department of Energy officials and lawmakers.
“We would like to see how we can promise investors to come in and tell them that power rates will go down in this country into a competitive rate,” he said.Based on a report by the National Statistical Coordination Board (NSCB), electricity rates in the Philippines are among the highest in the region.
Another study previously conducted by Perth-based consultancy firm International Energy Consultants (IEC) revealed that power rates in Luzon were the ninth-highest electricity tariffs of the 44 countries surveyed.
One of the main reasons for this, the NSCB said, is the absence of government subsidies for electricity, unlike in Indonesia, Thailand, and Malaysia, where governments subsidize electricity costs.
He said some foreign investors are not keen on exploring possible investments in the Philippines because of its high electricity cost.
“Electricity rates are very important factor to be industrialized,” he added.
Carlos said if the power rates would go down to a very competitive level, no doubt more foreign investments would come into the country.
“You can picture the view of converting your gas supply into power where if power rates go down, investments will come in,” he told the industry players.
Carlos said the stakeholders can take advantage of the country’s rich resources for natural gas projects, adding that the country is surrounded by gas fields.
He said these natural gas projects could consequently drive generation costs lower.
But Carlos said despite the country’s vast resources, the Philippines is still one of the countries with high electricity rate.
“We are very disappointed that until now we have not experienced these benefits,” he said.
At the same time, Carlos called on industry players to also diversify their projects in various parts of the county in order to provide power at competitive rates.
He said power rates in different parts of the country should also be competitive in order to spur developments in rural areas.
“You are concentrating in Luzon and Mindanao but a lot of people wanted the industries coming to their provinces,” he said.