PCCI Highlights Power Subsidy as Crucial to Attracting Investment at Power Summit 2024
Makati City, Philippines – The Philippine Chamber of Commerce and Industry (PCCI) has called on the government to adopt power subsidy policies to enhance investment attractiveness in the country. This appeal was made at the PCCI’s Power Summit 2024 in Makati City, emphasizing that competitive electricity costs and a reliable energy supply are essential to drawing foreign investors.
According to Philippines News Agency, the Philippines faces significant energy challenges, including the impending depletion of the Malampaya natural gas fields, the need to shift from coal, and rising energy demands from a growing economy. Mangio noted that these issues come at a time when the country has one of the highest electricity rates in Asia, urging precise and strategic navigation of these challenges. George Barcelon, PCCI Chairman and Director for Energy and Power, supported this by highlighting that the Philippines had the highest electricity rate among ASEAN countries at USD 0.19 per kilowatt hour in 2023.
Barcelon provided a comparison showing that neighboring countries with lower power costs have attracted more substantial foreign direct investments (FDIs). For instance, Indonesia garnered USD 24.7 billion in FDIs in 2022, significantly more than the Philippines’ USD 9.37 billion. He suggested that subsidies in these countries are not merely costs but investments that have spurred economic growth and attracted investors.
Further advocating for policy changes, Barcelon called for urgent executive action on power subsidy, which could include incentives like the adoption of a uniform franchise tax for distribution utilities or a zero-rating of value-added tax on electricity sales to consumers. He emphasized the need for a mindset shift to view subsidies as investments with significant returns rather than mere expenses.
The PCCI also proposed additional executive actions, such as designating power sustainability, quality, reliability, and cost as key components of the national strategy for growth, developing a power supply deployment strategy, and improving the management and technical capacities of electric cooperatives and distribution utilities. Additionally, the creation of Regional Power Councils to draft an Energy and Power Strategic Program on a per-grid basis was suggested.