PCCI warns of price increases as coal costs soar
Local industries are feeling the pinch of rising coal prices, according to one of the country’s biggest business organizations, which will likely lead to a new round of price increases.
George Barcelon, president of Philippine Chamber of Commerce and Industry (PCCI), said on Friday that coal prices have risen substantially, making it one of their primary concerns in doing business in the country because of the direct impact on power costs.
“Lately, the challenge to us is the price of coal. Recently, it almost went up by 50 percent. The added cost has really been reflected in the high prices of electricity. And that in a way has a snowballing effect,” Barcelon told the Inquirer.
A number of publicly listed conglomerates reported losses to the Philippine Stock Exchange in August due to soaring coal prices, which have already breached the $400-per-metric-ton level.
Barcelon said many consumer goods manufactured locally are at stake since power costs factor significantly into their prices.
“This would translate to higher costs of energy. And then this would just be added to the consumers’ shoulders. We can’t do anything about it. If we do not increase the price, then we would stop operations,” he said.
The price of water may also soon follow as electricity is used to power the country’s water-pumping stations, he added.
“I think the challenge now is really how to contain this,” said the PCCI official.
On Wednesday, an industry group of buyers and exporters of garments had the same complaint about the high price of electricity in the country, saying that it was stifling the growth of the already struggling local garments and textile industry.
Robert Young of the Foreign Buyers Association of the Philippines said the government should target the core issue of bringing down electricity costs.
The PCCI official said he was glad that the Philippines was recently able to work out an agreement with Indonesia for a constant supply of coal, hoping that it will bring enough supply to hold down the costs.
“I hope this government-to-government arrangement will mean that there will be a reasonable procurement of coal for us,” he said.
