Friday, April 6, 2012


THE increase in electricity rates that will be reflected in the National Power Corporation's March 26-April 25 billing cycle and the filing of wage adjustment petitions by the Trade Union Congress of the Philippines (TUCP) in three regions should be a serious concern not just for the business sector. It deserves the paramount attention of those who want the Philippines to catch up with its Asian tiger neighbors. R0.044 kwh will ensure that the Philippines remains the country with the most expensive electricity rates in Asia as reported in the Japan External Trade Organization (JETRO) 2011 survey. This will add to the decreased competitiveness of Philippine industry which is already suffering from the deluge of low-cost imports, increases in the cost of local raw materials, and loss of skilled manpower to its Asian neighbors. Even with higher electricity rates, parts of the country like Mindanao are already experiencing brownouts while other areas are expected to follow the same fate in the near future. We welcome Philippines Air Asia which recently had its inaugural flights from the Diosdado Macapagal Airport in Clark to Davao and Kalibo, Aklan. We commend Air Asia group CEO Tony Fernandez and Air Asia, Inc., CEO Maan Hontiveros for providing Filipinos another alternative.
The Luzon increase of 69 centavos per kilowatt hour (kwh), Visayas' increase of 60 centavos kwh, and Mindanao's increase of
The present state of the energy sector is traceable to the actions of the cabinet members of the Corazon Aquino administration who either junked or sat on the significant portions of the well-designed energy development plan of the Marcos administration, crafted and being implemented by the team led by respected executive Ronnie Velasco. If the plan had been followed, the country would have been amply supplied with power from a diversified pool of energy sources, including nuclear power, which has been the energy base of many countries that developed economically in the past decades. The University of the Philippines had a program to provide the technical and professional support, with PhDs in specific specializations, many of whom had to leave the country and join the staff in the nuclear facilities of other countries.
If the Philippines is to provide competitive power rates, the solution is not to mandate lower energy costs. It is to attract investments in the sector by providing an environment where investors will make a satisfactory rate of return. The government must give full support to alternative sources of energy like solar and wind power, bringing down the costs so that not only the rich but green residents of exclusive enclaves can afford to be environmentally correct. The proposal of Congressman Mark Cojuangco on nuclear power should be revisited, putting aside the emotional arguments against it.
In the case of petitions for wage increases which the regional boards will start evaluating, the government should ask - who will benefit from such increases? Obviously, the employed sector will now have more funds and increase their consumption, which should make the malls and supermarkets owners happy, as well as the importers who provide most of the products on the shelf. The losers will be the unemployed who will continue to look for jobs since potential investors may locate their enterprises elsewhere; some of the presently employed who may lose jobs as businessmen close down enterprises; and the rest of the business sector who would have benefitted from increased sales of new consumers in the market. I have always believed that mandated wages is not the way to go; rather collective bargaining is the answer where the government is an honest broker that ensures the accuracy and transparency of financial information for decision making.
In both power rate and wage increases, the government should prevent a double whammy to business and industry. It could mean a knock-out of the country's bid to be an Asian economic tiger.