THE Department of Economy, Planning, and Development (DepDev) is pushing for stronger power-sector reforms to bring down electricity costs, which it identified among the most binding constraints to growth and industrialization.
Socioeconomic Planning Secretary Arsenio M. Balisacan said proposed amendments to the Electric Power Industry Reform Act (Epira) should strengthen the Energy Regulatory Commission (ERC) and improve its coordination with the Philippine Competition Commission (PCC).
‘One is about the need to strengthen ERC. The second is to strengthen the coordination between the ERC and the Philippine Competition Commission so that it is more effective in going after market abuse or abuse of market power by any participant in the electricity market,’ Balisacan said during the Development Budget Coordination Committee (DBCC) briefing.
Balisacan said investors have long flagged expensive electricity as a major constraint to expanding economic activity.
‘One of the most binding constraints to growth and industrialization, as pointed out by many investors, is the high cost of electricity,’ he said.
‘If the investment is able to reduce that cost, then the multiplier effects are going to be much better,’ he added.
In his presentation earlier in the day, Balisacan said ensuring reliable and affordable energy would require the expansion of renewable generation, modernization of the power grid, more efficient permitting processes, and stronger competition in the electricity market.
DepDev also identified Epira amendments among the Marcos administration’s priority legislative measures under energy security and sustainability.
He said the government had previously opted to pursue Epira amendments in segments due to the complexity of revising the law in one sweep.
Among the areas identified were extending the life of the Power Sector Assets and Liabilities Management Corp. (PSALM) until 2036, strengthening the ERC, and reinforcing the competition mandates of both the ERC and PCC.
Broadening sources of growth
The push to bring down electricity costs also comes as DepDev seeks to attract more investment into industry and exports to broaden the country’s sources of growth.
Balisacan said the Philippines needs to strengthen investment and exports while revitalizing industry, noting that the country continues to lag several of its Southeast Asian peers in fixed investment and export performance.
He said high energy costs make it harder for manufacturers to expand and generate better-quality jobs, particularly in export-oriented industries.
‘If the cost of energy is high, there’s no way that you could generate a lot of jobs, high-quality jobs, because your manufacturing would not be able to generate good enough employment and especially for exports,’ Balisacan said.