MANILA, Philippines — The government has approved in principle the extension of the discounted power rates to economic zone locators until such time that “open access” is implemented in light of the 20 percent growth slowdown in electronics exports due to the global economic slump.
Trade and Industry Secretary Gregory L. Domingo revealed this to reporters covering the Luzon Investment Conference saying an inter-agency meeting was held Wednesday to tackle the petition by the economic zone locators.
“Yes, approved in principle until such time that Retail Competition and Open Access (RCOA) is implemented but we have to find a legal way to do it,” Domingo said noting that the grandfather rule in this case cannot be applied anymore.
The special rate for ecozones was a pact sealed previously between Meralco and National Power Corp.and assigned to Power Sector Assets and Liabilities Management Corp. (PSALM) following the company’s privatization. The discounted rate will lapse on December 25 this year. It was meant to help businesses wade through high cost of operations, especially for those in the power-intensive sectors.
“The government is looking for a solution because the ecozone locators are mostly electronics companies and they are suffering from loss of demand so it is not a good time to experience higher power rates so we are trying hard to help them out,” he said.
While the government agencies have agreed in principle to extend support, Domingo said they are looking at how to carry this out. He said it is too premature to talk about the options, which could include subsidy.
Norberto A. Viera, chairman of Semiconductor and Electronics Industries of the Philippines Inc. (SEIPI) and president and managing director of Texas Instruments (Philippines) Inc., told reporters that exports in the semiconductor industry is expected to decline by as much as 20 percent this year due to the economic slowdown worldwide. Prospect for next year has also remained uncertain, he said.
“Utilization of capacities is also dependent of demand,” he added although he said that the expansion of Texas Instruments in Clark has been on track. The company’s exports may also be affected but not as much.
The good news is that there has been no layoff of workers, he said.
Lilia B. de Lima, director of the Philippine Economic Zone Authority (PEZA), has asked Trade and Industry Secretary Gregory L. Domingo, who is also PEZA chairman, to appeal for the intercession of President Aquino in light of the decision of the PSALM not to extend the Ecozone Rate Program (ERP).
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By: Bernie Cahiles-Magkilat
Source: Manila Bulletin, Nov. 24, 2011
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