P1B POWER SUBSIDY


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Latest News Philippines: P1B POWER SUBSIDY – Journal.com.ph:

PRESIDENT Benigno Aquino has approved a P1.16 billion power subsidy for economic zones in a bid to attract more foreign investments.

Budget Secretary Florencio Abad said in a press statement that the funding was released to the Power Sector Assets and Liabilities Managament (PSALM) for the extension of its memorandum of agreement with the Manila Electric Company.

The fund will cover export manufacturing companies under the Philippine Economic Zone Authority.

“By extending this assistance, the administration will not only help key PEZA industries that are already established in the country. The energy subsidy will likewise encourage the influx of foreign investments and boost the Philippines’ competitiveness vis-a-vis its neighbors,” Abad said.

Aquino earlier approved the extension of the agreement between PSALM and Meralco until December 25 this year, or until implementing open access in the energy sector, whichever comes first.

From January to April this year, the funding requirement for the power subsidy in ecozones has already reached P453.7 million.

The subsidy will be charged against the Department of Energy’s share in revenues from the Malampaya natural gas operation in Palawan.

“Through these measures, the Aquino administration intends to usher in more investment activity into the country. Electricity rates in the Philippines are already the highest in Asia, and we want to mitigate the cost of doing business here so that the country becomes more attractive to foreign investors,” Abad said.

Power rate hikes

Also yesterday, Malacañang tossed to the Energy Regulatory Commission the task of explaining to the public its reason for approving the power rate hikes for distributor Meralco.

Valte insisted the ERC is “independent” from the Department of Energy and that the Palace has no control over its actions.

She also pointed out Meralco’s application for a rate increase was made as early as 2007, long before the Aquino administration took over.

Earlier reports said the ERC approved Meralco’s petition for a maximum average price of P1.6303 per kilowatt-hour (kwh) for distribution, supply and metering charges.

Meralco was quoted as saying the increases will be reflected in the bills of Meralco customers starting July.

On the other hand, Valte contested speculations of possible power outages in Luzon in the near term, saying the National Grid Corp. of the Philippines (NGCP) had already said it had successfully hurdled a yellow-alert situation.

She said the NGCP had coordinated with the DOE and Meralco to make sure there will be no power outages in Luzon in the near term.

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