THE National Competitiveness Council (NCC) is conducting its own study to determine if the Philippine economy could generate significant benefits from possible reduction in power costs for industries despite revenue loss.

Various NCC private partners, particularly the Philippine Exporters Confederation, have been asking the government to reduce for at least four years the royalties from indigenous energy sources to immediately lower power costs in the country.

The Philippine electricity rates are among the highest in the region, one factor that has been blamed to the country’s declining competitiveness.

It was found that a significant portion of high power costs are royalties or shares from earnings the government has been collecting from Malampaya natural gas project and power plants fueled by geothermal energy.

NCC director Ruy Moreno said that Finance Secretary Margarito Teves “wants to see” a thorough study of the best option.

“Because of that reduction in royalty on the government side, it means it can be passed on to the consumers or to the factories by reducing their costs by so much, thus increasing their competitiveness, therefore  stimulating more demand for their products. That’s what he wants to see,” he said.

Moreno said, “Economic gains should be equal or greater to the impact of possible revenue loss” as a result royalty reduction from power plants that use local fuel.

The government generated revenues from royalties of around P4.8 billion in 2005. A power-generation firm believed that if such amount is plowed back to industries, this could improve their competitiveness and enables them to create more jobs. The government’s value-added tax (VAT) collections from these industries are also expected to increase.

Francisco Viray, private-sector champion of NCC’s energy cost competitiveness and sufficiency working group, said his group is just awaiting government action on this issue. Viray is former energy chief.

“We have included this in a resolution that we will submit to the government. It is an important action wherein the government has to take position,” he noted.

Should the government agreed on such proposal, Viray clarified that “any amount of reduction must not be charged to future universal charges.”

Aside from this effort, the energy working group of the NCC is also working on priority action agenda aimed at lowering power costs in the country.

These include achieving “real” open access to the distribution sector of the electricity industry; the launching of national program on energy efficiency and conservation in 2008; instituting support mechanisms for electric cooperatives; and pushing for the development and utilization of alternative and renewable energy.

“One of the things we wanted to see is open access. It is already part of the Epira [Electric Power Industry Reform Act], it’s just a question of being able to implement it within the soonest possible time. I guess, the 2009 target is achievable,” the former energy secretary noted.        

Viray said his group is encouraging industries to forge bilateral contracts as a means of stabilizing power rates in anticipation of the open access in 2009.  

“As a word of advice: start signing bilateral contracts, but never sign bilateral contracts with reference to the spot market, otherwise you won’t be stabilizing your rates,” he said. ---Philexport News

THE president of the French chamber of commerce in the Philippines said businessmen from the European country are now starting to see Cebu not just as a tourism destination, but as a place or investment.

AGGRESSIVELY positioning itself to contribute to the government’s Biofuels Act of 2006, Eastern Petroleum Corp. (EPC) is set to sign a joint-venture agreement with Guanxi Estate Group for its first phase of project development before the end of the month.

AN independent United Nations (UN) human-rights expert warned poor and developing countries, including the Philippines, that converting crops such as maize, wheat and sugar into biofuels would drive up the prices of food, land and water. 

MORE than 4 million foreigners, mostly tourists, have entered the country during the first nine months of the year, up 6 percent from those who arrived in the same period last year, the Bureau of Immigration said.

THE peso will likely soar to fresh multiyear highs against the US dollar once the Federal Reserve—the American central bank—slashes its key rate by either one-fourth or one-half a percentage point this Wednesday, the Trade Union Congress of the Philippines (TUCP) said.

THE National Competitiveness Council (NCC) is conducting its own study to determine if the Philippine economy could generate significant benefits from possible reduction in power costs for industries despite revenue loss.

BOCAUE, Bulacan—After palay prices reached a new high, hitting P17 a kilo early inSeptember, it started to drop after the first week of September as the harvest season started and hit P11 a kilo some 10 days ago.