PCCI: Higher power costs must be avoided

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The government should avoid any action that would raise electricity rates in the country, the Philippine Chamber of Commerce and Industry (PCCI) said on Tuesday.

In a position paper on the proposed higher tax on coal that was posted on its website, PCCI said that, since the country is “already poorly situated in terms of power-cost competitiveness, it is important to” prevent or avoid anything that would increase electricity rates and “diminish the quality of our power industry.”

The Senate version of the Tax Reform for Acceleration and Inclusion (TRAIN) bill seeks to increase the tax imposed on coal from the current P10 to P100 per metric ton in 2018, P200 in 2019 and P 300 in 2020.

“It is imperative that any policy affecting the quality and costs of power supply should be approached with” the awareness and “purpose of enhancing key elements of our economy, and that [it should]promote sensitive inclusiveness,” PCCI said.


“Power quality and costs are, indeed, among those critical elements” that local and foreign investors are evaluating carefully, “especially with regard to heavy or so-called ‘bricks and mortar’ type of production, which we need to focus on, too,” it added.

A lot of investors already left the country due to high and “unpredictable” power costs and policies, PCCI said, adding that the supply and delivery of electricity must be affordable and efficient in order for the country to continue realizing its economic potential.

Talk about the tax increase being not that high or being too small to be of consequence, among other issues, only distracts from the fact that hiking the country’s already uncompetitive electricity rate should be avoided.

PCCI said the Philippines’ average age of current power-generation capacities is now 15 years or more. It added that some 25,000 to 30,000 megawatts need to be in place within the next 10 to 20 years.

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