Dutertenomics and the government’s Build, Build, Build agenda will not take off if ample and cheap power supply is not readily available. The economy cannot also match the strides of Singapore, Thailand and Malaysia if the Philippines cannot establish a credible broadband network and make connectivity at par with its Asian neighbors.
The power sector in the Philippines, despite reforms initiated by the Electric Power Industry Reform Act, has not developed into its real potential as regulators fail to get their act together. Unnecessary delays in getting many power plants up and running due to lobbying by renewable energy advocates and leftist groups are not contributing to efforts to trim electricity rates in the Philippines.
The impasse at the Energy Regulatory Commission has already ticked off Quezon Rep. Danilo Suarez. The lawmaker in a congressional hearing last week asked the ERC for a timeline on the approval of the power supply agreements that retailer Manila Electric Co. forged with the generators over a year ago.
Suarez was particularly concerned about the 1.200-MW Atimonan coal-fired power plant which local residents have been clamoring for. He demanded to know the cause of delay on the part of ERC, stressing the recent supply shortfalls and yellow alerts the Philippines has been facing—a sign that the country’s power supply simply cannot match the increasing requirements of the economy.
Suarez demanded an assurance from the ERC to resolve Meralco’s application and avoid a power supply shortfall. The lawmaker saw no legal impediments or roadblocks to the ERC approval, notwithstanding the noise from so-called environment activists.
ERC officials finally committed to resolve the issue in three months pending hearings and due process. The economic stakes are high. Filipinos do not want a return to he crippling blackouts experienced during the latter years of the Corazon Aquino administration, when the economy was on the verge of collapse.
Suarez’s take on the inaction of the ERC is understandable. The lawmaker during the same Congressional hearing cited the benefits of the Atimonan coal plant to the local community and the province. Revenues from the power plant, once operational, will be shared by the barangay, municipality and the province. This means increased medical assistance, educational services and livelihood to all the members of the community.
Such benefits are already being enjoyed by communities hosting the Pagbilao and Mauban coal plants, with no reported case of any kind of safety or health hazard.
On another positive note, EO 30 signed by President Rodrigo Duterte is expected to streamline the licensing and permitting processes required of a power plant by classifying such projects as of “national significance.” Power supply in the Philippines shouldn’t be a problem as long as government agencies and regulating bodies like the ERC enforce the proper and legal process for all energy projects, and prioritize them as of national significance.
Connectivity age
Investors see a real window of opportunity in the Philippines in what is termed as the country’s “Golden Age of Infrastructure.” For them, the initial P3.6-trillion budget of President Rodrigo Duterte for the infrastructure program is a dream come true.
One of the earliest concluded investment deals is that of between Japanese Prime Minister Shinzo Abe and President Duterte over the funding of a subway system to the tune of P227 billion. The giant project aims to solve the worsening traffic problem in key and densely-populated urban areas in the country.
But another another serious infrastructure problem in the Philippines that impacts on the gross domestic product is connectivity. The lack of telecommunications infrastructure has made the Philippines lag behind the connectivity factor, especially when compared with its neighboring countries where their governments built and funded their respective national broadband network.
Commissioner Gamaliel Cordoba of the National Telecommunications Commission acknowledged during the recent Philippine Telecoms Summit that all other Asean countries had telecoms networks that are either wholly-owned, partly financed, or operated by their respective governments. It is only in the Philippines that the broadband networks are constructed, owned and operated by private companies.
The infrastructure problem here will be licked if the Duterte administration succeeds in itsNational Broadband Plan to build the corresponding network infrastructure. With a budget of P77 billion to P199 billion to implement the plan over the next three to four years, the government wil become a veritable “third telco player.”
The implementing agency here is the newly formed Department of Information and Communications Technology headed by Atty. Rodolfo Salalima, who cited the mandate set by the President during his first State of the Nation Address in July 2016.
“We are establishing broadband infrastructure from the northern to the southern parts of the country. This aims to deliver telecommunications services to areas in the countryside without access to the internet,” Salalima said, adding “we chose the option to build a broadband infrastructure that will be operated by DICT.”
The DICT, however, cannot implement the plan alone, and operate in a vacuum. It needs operational telcos like PLDT-Smart and Globe Telecom to participate in the program.
Unfortunately, PLDT-Smart and Globe Telecoms could be crippled by the aggressive intervention of the Philippine Competition Commission and the decisions and actuations of both the National Telecommunications Commission and the DICT. There is fear among industry observers that the NBN program will be hindered by PCC’s overlapping role with the NTC and the DICT.
This stems from the case of the joint acquisition last year of the telco units of San Miguel Corp. by both PLDT-Smart and Globe Telecom for P70 billion. The PCC has sought to declare the transaction null and void for being anti-competitive.
After declining to accept the Court of Appeals injunction and going up to the Supreme Court, the PCC also went against the tacit endorsement of the NTC as the rightful regulatory agency on the joint use of the 700MHz frequencies owned by the SMC telco units acquired by both PLDT-Smart and Globe.
The PCC must recognize that the NBN program, as supported by PLDT and Globe, is a significant step forward in upgrading the state of the telecoms industry in the country.
The PCC must must take a more collaborative approach to an industry issue that is more complex than it is perceived to be. The antitrust body, in short, should not be a hindrance to Duterte’s Build Build Build program.
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