The biggest business group in the Philippines called on the government to subsidize electricity for businesses, claiming this was needed to enable local industries to compete with those in neighboring countries where such benefit was available.
Jose Alejandro, chair of the Philippine Chamber of Commerce and Industry’s energy and infrastructure committee, said in a forum that a power subsidy was needed to expand domestic markets and encourage business activities, which would help sustain economic growth.
Alejandro took part in a discussion on how to meet rising demand for electricity at lower cost in a forum organized by Stratbase ADR Institute and CitizenWatch Philippines.
“We have to think of how to subsidize our power cost. No way can we run away from the word ‘subsidy,’” Alejandro said.
“We all know that our competitors are subsidized,” he said. “Their governments do so because they want foreign investment to come into their country, and they are succeeding.”
Alejandro said that in neighboring countries, growth in gross domestic product is rising and and power cost is going down. “That is not happening here.”
According to the Australia-based International Energy Consultants (IEC), electricity expenses are subsidized in Thailand, Malaysia, Indonesia, Taiwan, South Korea and Japan—at least for residential consumers.
An IEC report from last May found that such subsidies were in the form of cash grants, subsidized fuel or deferred expenditure.
Alejandro added that the government should help make the public—households and enterprises alike—more aware of the competitive selection process (CSP) for power supply agreements between electricity generators and power distributors.
The CSP is a policy that requires power supply agreements be subject to competing offers as a means of ensuring that consumers would pay for the lowest-priced electricity.
“Make CSP public and focus on it so that we can bring in investment and bring down the power cost,” Alejandro said.
“We should have real competition [in the electricity sector] that is transparent,” he said. “If real competition would be encouraged, easily that could bring down the cost [for businesses] by 10 percent to 15 percent.”