By Alena Mae S. Flores
The Philippine Independent Power Producers Association Inc. seeks the permanent lifting of coal import tariffs from non-ASEAN Free Trade Area countries to diversify coal supply.
“We are asking the Tariff Commission to consider the permanent removal of coal import tariff for non-AFTA countries,” PIPPA president and executive director Anne Estorco Montelibano said in a recent hearing.
“[We seek] removal of tariff for all coal imports from all non-AFTA countries,” Montelibano said.
The Philippines enjoys zero coal tariff for coal from AFTA countries—Brunei Darussalam, Indonesia, Malaysia, Singapore, Thailand and Vietnam.
The country also enjoys zero tariffs for coal coming from Australia under the ASEAN-Australia-New Zealand Free Trade Agreement.
Other countries are subject to a 7-percent tariff under the Most-Favored Nation treatment.
“We need to remove the tariff on coal. Our rationale is that we need to diversify imported coal sources,” Montelibano said.
Montelibano said the Philippines sources 99 percent of coal for power from Indonesia.
She said the coal export ban early this year exposed significant risks because of the country’s heavy dependence on Indonesian coal.
“The political and regulatory uncertainty in Indonesia poses an ongoing risk for the export ban recurring. There is a need to explore other supply sources in lieu of increasing worldwide coal prices,” Montelibano said.
Australia supplies a minimal portion of the coal for power, while Indonesia and Russia supply coal for the cement industries.
Indonesia, China, Korea, India, Russia and Vietnam supply coal for other uses.
“There is a need to ensure PH energy security. This is the most important as we are recovering from a post-pandemic world, and we are trying to achieve our goals to fully develop our country, we need a stable, reliable, and sufficient energy supply,” Montelibano said.
Aboitiz Power Corp. assistant vice president for fuel management Mark Lim said coal power stations generate baseload supply, providing the most reliable and cheapest form of energy.
“In terms of the removal of tariffs, it will be most ideal for us if the tariffs were removed on a longer-term or, if not, on a permanent basis because that will enable us to contract long-term and provide more stability and predictability in terms of pricing,” Lim said.
Jon Cleofas, Aboitiz Power assistant vice president, said the permanent removal of the coal tariff “will have no foregone revenue effects to the country.”
“We are already enjoying a zero import tariff, and 99 percent of our coal source is from Indonesia, which enjoys a zero percent tariff,” he said.