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POV Philippines by Jon Joaquin

Mindanaoans are paying
for electricity we never get to use

by Jon Joaquin

When I’m in Manila I almost never fail to point out (to anyone who would care to listen) that we who live outside the national capital region subsidize the train rides of those who take the MRT and LRT. Currently, train riders pay a minimum of P13, but what most don’t realize is that the fare is heavily subsidized by the government. Without such support, a train ride on the MRT would actually cost around P60, while one on the LRT would be P40 (based on 2013 figures). That means government shoulders P47 for each person taking the MRT and P27 for the LRT.

Where does the money come from? Taxes. And not just the taxes of those in Metro Manila: in an article he wrote in Business World in 2013, then-UP professor (now Budget Secretary) Benjamin Diokno said: “Who bears the burden of the subsidy? Practically all Filipinos who pay any form of direct or indirect taxes (VAT for example).” That means, he said, that farmers in Northern Luzon and fisher folks in Southern Mindanao who have never taken a ride on the MRT or LRT subsidize Metro Manila rail transit riders.

If you think that’s unfair, wait till you hear this: we Mindanaoans are also currently sharing in the cost of paying for power generators that are located outside our island, with not a single watt of the electricity available to us. The Duterte administration has been pushing for the cheapest power to push our industrialization, reasoning that the Philippines contributes a negligible amount of harmful gases when compared with industrialized nations. But ironically, it is these countries that are elbowing the Philippines to push renewable energy (RE).

This pressure pushed the Aquino administration to impose on all of us an unnecessary line in our electricity bill. The Feed in Tariff (FIT) is a set of incentives given to power developers for a period of 20 years to invest in the more expensive RE sector. In order to cater to investors in renewable energy, the government under Mr. Aquino agreed to pay these developers so they can recover their investments.

So the question arises once more: who shoulders these payments? None other than you and me, the taxpayers. The rate is now 12.4 centavos per kilowatt hour (kWh), and this is paid for by all of us through our electric bill (in our home, for example, the FIT is 36.46 pesos). And like the MRT and LRT, not one RE power plant is located in Mindanao (at least none that was funded by the FIT. About half of Mindanao’s electricity is supplied by the Agus and Pulangi Power Plant Complexes; hydroelectric power plants that were built way before the FIT was implemented.) The 68.8-megawatt hydroelectric power plant in Manolo Fortich, Bukidnon is still being constructed by Hedcor and will be commissioned in the third quarter of this year. Meanwhile, we continue to pay for something we do not enjoy one bit.

Lest I be misunderstood, I have nothing against renewable energy; in fact I wish we could head that way now instead of having to take Duterte’s stance and be “agnostic” about where our power comes from. But it should be implemented fairly, not in the Luzon-centric manner in which the Aquino administration implemented it.

But since we are talking about renewable energy, let me say that I think focusing too much on it at this stage in our development as a nation can be counter-productive. What the lobbyists do not tell us is that the Philippines is just a small contributor to greenhouse gases while more advanced countries have already dumped so much poison into our atmosphere. Not only that, we are actually one of the leaders in renewable energy in the world, with 32 per cent of our power coming from renewable sources (according to the Department of Energy). The US figure, in contrast, stands at just 12 per cent.

So if anyone should throttle down, it is they, not us. Meanwhile, we need to push ourselves to become an industrialized nation, and we cannot do that if we do not have reliable and affordable energy. Our electricity is already one of the most expensive in Asia; we deserve some leeway so that we can move forward. 

The views and opinions expressed in this column are those of the original author, and do not necessarily represent those of the Pilipino Express publishers.

Jon Joaquin is the Chief Editor of www.mindanation.com. E-mail Jon at jonjoaquin@gmail.com

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