Drilon: Energy crisis looms
Thursday, September 23, 2004
By Jess DiazThe Philippine Star 09/23/2004
As if the worsening fiscal problem facing the nation were not enough, Filipinos may soon deal with a power crisis that could be worse than the blackouts experienced by the country during the early 1990s.
Addressing the Manila Overseas Press Club (MOPC) at the Hotel Intercontinental in Makati City last night, Senate President Franklin Drilon said the nation’s leaders - both from the administration and the opposition - must put their heads together to solve these twin problems.
"Aside from the fiscal crisis, our nation is threatened by another power crisis in the near future. Power blackouts, similar (to) or worse that what we had more than a decade ago, will be a big national embarrassment and will surely erode investor confidence," Drilon said. "Indeed, (a) fiscal crisis coupled with (a) power crisis will render catastrophic consequences (for) the Philippine economy."
In the same forum, Speaker Jose de Venecia Jr. presented a 12-point "wealth-creation" proposal which he said he will submit to President Arroyo.
De Venecia said the proposal is a "parallel, simultaneous program" that complements the President’s eight revenue measures aimed at "reining in the budget deficit and keeping the country’s economic growth on track."
Drilon said the country must put its "economic house in order, as the fiscal crisis is at our doorsteps."
During his speech at the opening of the 13th Congress in July, Drilon had already sounded the alarm bells of a looming fiscal crisis. "We have already seen the writing on the wall. Those who choose to sugar-coat the less savory facts are like Nero, who was fiddling while Rome was burning," he said.
Wild and extravagant Nero was the last of the Julio-Claudian emperors of the Roman empire and he was said to have gotten onto a private stage to orate the fall of Troy and play the fiddle while Rome burned. It was during the reign of Nero that Christians were persecuted, tortured and fed to the lions.
Drilon said the government must bring the budget deficit, which tops the P200 billion mark, to "more manageable levels to enable us to boost the social investments needed to increase human capital, which is crucial for development."
The World Bank said in a study that the Philippines has one of the lowest spending rates for social services in the world, Drilon added.
"It is said that every day we are losing our brilliant minds in the fields of medicine and education to employers abroad," he said.
"We cannot fault them if they seek better opportunities outside the country - but we can encourage them to stay and help us in our development efforts by offering them competitive salaries and incentives. We need more doctors and teachers, especially in the rural areas, but we can only address this need if we increase our allocation for social services," Drilon said.
Despite the grim economic outlook, Drilon said "we must continue to provide hope (for) our people, even as we explore all avenues, try all possibilities and seek ways to ease their suffering."
"Lifting the country from the economic and social quagmire and providing security for our people are the biggest challenges faced by our government today," he said. "This is not the time for empty rhetoric. Our people want to see concrete actions, tough measures and political will. We must not let them down."
While some measures may be unpopular and politically risky, he said, "if these are for the nation’s highest interest, I am more than willing to take the risk."
"In difficult and uncertain times, we must not be afraid to take the high road. My commitment to political, economic and social reforms will not waver because I believe that the best legacy we can leave to our children and the generations yet unborn is a strong state, a robust economy and excellent social infrastructure," Drilon said.
‘Re-ignite, revive’
A major component of De Venecia’s 12-point wealth creation proposal is to "re-ignite and revive" the country’s mining industry with an estimated mineral wealth of $800 billion.
The Speaker particularly cited international investment opportunities in expanding the gold mining exploration in Mt. Diwalwal in Davao.
"We must develop the area, employ up to 20,000 miners and give them a profit-sharing arrangement so we can extract billions of dollars worth of reserves there," he said.
Other programs in the proposal, De Venecia said, lie in oil and natural gas exploration, a reforestation program, and a massive tourism program that includes the building of new infrastructure like airports and hotels, and creating a national infrastructure corporation.
De Venecia said the reforestation program to replant bald mountains across the archipelago "would yield up to $4 billion in ten years for $100 million in new investments."
"On top of this, it would help solve irrigation and major flooding problems and restore ecological balance," he said.
De Venecia noted the two million tourist arrivals in the Philippines pale in comparison with those of Malaysia and Thailand – each approaching the 10-million mark.
"We can have a turnaround as early as next year through a massive, conscious and creative program to reinvigorate the tourism industry," he said.
Also included in De Venecia’s 12-point wealth-creation proposal are jumpstarting the housing sector, developing the information technology sector and to take advantage of the skills of Filipino IT specialists as well as improving on the commercial viability of Subic and Clark in northern Luzon.
e also presented proposals that will address the development of urban and rural squatting and creating a "new generation" of farmers and fishers.
On the part of the Senate, Drilon informed his audience that he and his colleagues - both from the majority and minority - have agreed to work as one and hold a workshop on Oct. 22 to 23 to firm up concrete actions in contributing solutions to the fiscal and power shortage problems the nation faces.
We all admitted that there are problems and suggested reforms have been talked out before, as they have been thoroughly discussed in committee hearings in the Senate," he said.
During the workshop, he added, "we will identify the short, medium and long-term reforms that we are willing to undertake."
The fiscal problem has been exposed in several hearings by the finance committee chaired by Sen. Manuel Villar Jr. and the ways and means committee chaired by Sen. Ralph Recto.
The looming electricity shortage, on the other hand, was discussed in hearings conducted by the finance and ways and means committees and the energy committee chaired by Sen. Miriam Defensor-Santiago.
Administration officials have told these committees that the solution to the fiscal crisis is a combination of new taxes to generate P80 billion and a power rate hike that is expected to provide the cash-strapped and debt-ridden National Power Corp. (Napocor) with P75 billion more.
According to Recto, their prescription is a "double whammy" that would soon hit the public.
Many senators have blamed the President for the fiscal and energy problems the nation must confront.
Energy Secretary Vicente Perez said that unless new power plants are built now, a power crisis could hit the country in two or three years.
Perez said the increasing demand for electricity in Mindanao would make the region vulnerable to power shortage as early as the latter part of next year. He also said it would take four years to build a power plant.
The power industry has not been attracting new investors because of low electricity rates, Perez added.
posted by philpower @ 9:29 AM,
