Here is one of the biggest disincentives to foreign direct investment: the Philippines has the second highest commercial power rates in the region, after Singapore. This was revealed at a hearing yesterday of the House of Representatives’ energy committee, where a congressman disclosed that the Philippines also has the highest residential power rates in the world.
The House panel learned that commercial power rates are 14 centavos per kilowatt-hour in Singapore, 13 cents per kwh in the Philippines, 12 cents in Japan, eight cents in Thailand, seven in Malaysia, six in Vietnam, and five cents in Indonesia.
For residential users, the rates are 18 cents per kwh in the Philippines, 17 cents in Japan, 15 in Singapore, eight in Thailand, seven in Malaysia, five in Indonesia, and three cents in Vietnam.
The figures were reported to the House committee by officials of the Energy Regulatory Commission and the Power Sector Assets and Liabilities Management Corp. PSALM is reportedly planning to ask the ERC for another increase of 15 centavos per kwh in power rates to repay its debts.
Ten years after the enactment of the Electric Power Industry Reform Act, the industry is still badly in need of an overhaul. Experts have warned that the country could face another energy crisis this year the likes of which the nation suffered during the final months of the presidency of Corazon Aquino. Worse, power rates have grown exponentially since those months of eight-hour daily blackouts. In residential areas, soaring electricity costs have made comfortable ventilation a luxury for millions of Filipinos.
Inadequate, unreliable and expensive power supply has often been cited as one of the biggest disincentives to investment in this country. High power costs are driving even some Filipinos to bring their business elsewhere in the region. If the government wants to lure more job-generating investments, and before the country again reels from crippling daily blackouts, this problem must be confronted with urgency
