|
It should be obvious by now the Philippines has two major
problems—food and fuel, including electricity.
Agriculture is not sexy. Early on in their
lives, Filipino kids are drilled into thinking and singing that
“planting rice is never fun.” The result is that we have fewer
farmers now as a ratio of the population than we had 30 years ago.
The hectarage devoted to palay farming has been drastically reduced.
In the 20 years till the turn of this century, annual agriculture
growth was barely 1 percent, if not negative. Last year, agriculture
growth was a spectacular 5 percent.
Still, we have a serious rice supply deficit. It
is made worse by the most severe cereal shortages in the world in
the last 30 years. Food riots have erupted in at least a dozen
countries. Rioting cannot be ruled out here.
The Philippines has become the world’s biggest
rice importer. We imported 0.9 million tons in 2000 and 1.9 million
tons in 2007 and will import at least 2.2 million tons this year.
The price of imported rice, the benchmark Thai B
variety, has more than tripled to $1,100 per ton in less than 12
months. This Thai rice has doubled in price in less than four months
this year.
At local rice retailers, the rice that you could
buy at P18 a kilo last year now retails for more than P30, if you
can find it.
At the same time, crude oil prices have swept
past $135 per barrel. Speculation persists oil will climb to $200
per barrel, equivalent to maybe, P80 per liter of gasoline at the
pump. Goldman Sachs has said oil will spike to $200 in the short
term. The president of OPEC, Chakib Kheli, also thinks oil will hit
$200. The chief energy analyst of Deutsche Bank even thinks oil
could reach $250 a barrel. Oil climbing to stratospheric levels has
nothing with supply and demand. It has more to do with psychology.
You think oil will reach $200. So you speculate. Everybody
speculates. So the fear becomes self-fulfilling.
If oil hits $200 per barrel, then you could
expect rice to reach $2,000 per ton because there is now a direct
correlation between the price of oil and the price of rice. In the
eyes of greedy of speculators, and they are many, both are nothing
more than commodities to be hoarded and traded.
Meanwhile, you may complain and rant about high
electricity rates. The fact is there is an emerging serious shortage
of electricity, especially in the Visayas and Mindanao where demand
for electricity has been growing at double the rate of demand growth
in Metro Manila.
To cover up the deficit, more power plants must
be established. For power plants to go on stream, you need
investors. To entice investors, the profits from electricity must be
high enough to be worth their while. Those investors include the
likes of the Lopezes and the Aboitizes, who between them, supply or
control about 80 percent of total electricity supply in this
country. Note that high-cost electricity is far better than having
no electricity at all.
With the economy the strongest in 30 years,
demand for electricity has been greater now than anytime in the
past.
The Department of Energy forecasts peak demand
for electricity is to increase by 4.8 percent yearly, from 8,760
megawatts in 2005 to 14,401 MW in 2014.
Some 3,143 megawatts must be installed between
2006 and 2014—1,640 MW in Luzon, 728 in the Visayas, and 775 MW in
Mindanao.
If committed projects are not put in place,
supply shortages are expected in Visayas by 2008 and Mindanao by
2009.
The rule of thumb is each 1,000 MW of shortage
is equivalent of one hour of brownout daily. A 3,000-MW shortage
could mean three hours of brownouts daily.
Three hours of brownouts daily will nearly
cripple industries and commercial establishments, especially for
those for whom power is crucial—like glass and cement plants whose
machines cannot endure downtimes, and service institutions like
hospitals.
In the last five years, only 2,430 MW of power
was added to the country’s electricity supply. If 2,400 MW
required five years to install, then 3,000 MW will require at least
six years to put on stream.
That is assuming everything is in order and
government people will “minimize their greed”.
We are reaching a situation here where millions
have no rice to eat. Meanwhile, those with jobs cannot afford to go
to work to earn the money to buy expensive rice but cannot because
they cannot afford the transport fare. The rice in rice-rich
provinces cannot be brought to markets because gasoline has become
prohibitive. That situation is a recipe for social unrest.
biznewsasia@gmail.com
|
