Loss of ecozone power perks shakes up exporters

Already saddled with numerous problems, exporters now have to deal with another headache upon hearing that the government has decided to discontinue the special discounted power rates for economic zone locators once the agreement between the National Power Corp. (Napocor) and Manila Electric Co. (Meralco) lapses on December 25.

Philippine Exporters Confederation president Sergio Ortiz-Luis lamented that power rates in the country were already among the highest in the world. Taking away the special ecozone rates would make it even harder for exporters to cope with rising costs amid stiffer competition in the global arena.

“Some of our exporters are relying on the continuation of (the special ecozone rates). Without this, our competitiveness in inviting investors will suffer even further,” Ortiz-Luis said in a telephone interview Tuesday. “Those who are already here are now rethinking plans to expand and make new investments. We can’t afford high power, that’s what investors say.”

Also, many exporters are now exploring their options in Vietnam and Indonesia, while some have actually uprooted their operations here and transferred elsewhere in the region, he added.

The furniture industry, for example, has already lost some exporters and is bound to lose more, Ortiz-Luis said, declining to name the specific firms that had ceased operations here and those that were thinking of leaving the country in the near future.

Power Sector Assets and Liabilities Management Corp. (PSALM) president Emmanuel Ledesma Jr. had earlier said that the special ecozone rates would no longer be extended, despite separate appeals from Meralco and the Philippine Economic Zone Authority to extend the perks by a year.

Ledesma said it was “no longer reasonable for us to renew the power supply contract with (Meralco) given the limited supply that PSALM currently has and the high operating costs of generating power from the remaining government-owned plants in Luzon.”

The Ecozone Rate Program, which took effect in 2007, will cease when the transition supply contract between Meralco and Napocor expires on December 25.