DAVAO CITY—President Aquino came to the Mindanao Power Summit here last Friday with a mindset that the days of cheap electricity in this “land of promise” were over. In his speech to the summit participants, the President told the shell-shocked people of Mindanao, who are suffering from rotating power outages, that they must now pay a little more for electricity to enable the island to have “a stable supply of power for the future of the region.” He said only private-sector investment and participation could guarantee a steady and sustainable power supply for the region.
He slammed the door on the multisectoral petitions from the people of Mindanao to halt the policy of privatization of the energy-generating assets of the island and the revision of the Electric Power Industry Reform Act (Epira), that set this policy of transferring state-owned energy assets to private hands. The President said Mindanao was able to get an exemption from the implementation of the Epira that “liberalized the power sector and set privatization in motion and removed costly subsidies to make prices of fuel reflect their true market value.”
The President spoke to 18 to 26 Mindanao governors, as well as to contingents of civil society and the business sector, the Mindanao Electric Power Alliance, the Association of Mindanao Rural Electric Cooperatives, and Mindanao representatives in Congress, all of whom were unified behind the demand opposing the privatization of the Agus-Pulangui hydroelectric plants, which supply more than 75 percent of Mindanao’s electricity needs.
The President’s visit to Mindanao was in response to its calls for urgent short- and long-term solutions to its second energy crisis since 2010. The summit was convened, not by Malacañang, but by the Mindanao Development Authority, a local initiative, and his policy response disappointed the local leaders. The speech lacked measures that would address the shortage and generation of electricity supply that would fill the power deficit. It did not set a timetable within which to supply adequate power.
“Epira has not worked for Mindanao in 11 years of implementation,” said Davao del Norte Gov. Rodolfo del Rosario, who spoke for the Confederation of Provincial Governors, City Mayors and Municipal Mayors League of Mindanao. The summit was supposed to be a dialogue between the President and the regional leaders, in which he was expected to listen to the presentation of the region’s power problems. Instead, it turned out to be a monologue where the President did most of the talking and very little listening. He arrived with a formula before he had a chance to read the presentations by sectoral groups in Friday’s plenary. He asked the summit participants to have an open mind, but there was no sign of a reciprocal open mind.
Told of a plan by Mindanao leaders to formally submit their opposition to the privatization of the Agus-Pulangui hydroelectric power complex, the President said: “I never said that I was totally in favor, but there are many plants that were privatized in Luzon.”
“I remember that these plants have increased their available capacity beyond their installed capacity,” he said, adding that he would determine whether the manifesto against the planned privatization was reasonable.
“I will read [the paper]. But when I was there [in Mindanao], when I saw several governors, none them told me that,” the President later said. “We will see how reasonable their arguments are. I’m open to discussing it further with them. But I’m assuming that the Epira allows us to further delay the privatization of these assets.”
This tells us that the President’s speech was written without inputs from the presentations of seven Mindanao sectoral groups.
One of the papers that the President failed to consider for inputs from below is that of the Philippine Chamber of Commerce and Industry (PCCI) representing the business sector of Mindanao. The sector is composed of 42 provincial and city PCCI branches consisting of micro, small and medium enterprises. MSMEs account for over 63 percent of jobs nationwide. The paper, presented by Ricardo Juliano, PCCI vice president for Mindanao, reported a survey of estimates of losses inflicted by the power outages on the three growth pillars on the island—the agriculture sector, industry, and services.
In terms of business revenue losses, 83 percent of the respondents incurred a severe revenue drop, particularly those businesses worth less than P50,000, for every hour of power shortage. The rest of the businesses—ranging from P51,000-P100,000, P101,000-P200,000, to more than P200,000—suffered a deliberate income reduction of 4 percent per hour of rotating brownouts.
The survey also reveals the major effects brought by the power outages on the businesses’ daily operations: 23 percent experienced equipment breakdown; 20 percent, revenue losses; 17 percent, delayed production operations and cancellation of transactions; 12 percent, low output of production; and 9 percent, partial labor lay-offs.
The paper recommended that the total power systems program be anchored on hydro-based power plants, with fossil fuel plants as reserves. This will give the hydropower plants low cost as anchor in blending the cost of fossil fuel plants.