President takes immediate action on Energy Summit recommendations
Manila (5 February) -- President Gloria Macapagal-Arroyo fired off today several directives intended to soften the impact of the soaring prices of oil in the world market on the Filipino people, especially the poor, Philippine businesses and industries.
The directives were issued by the President in response to the recommendations of energy stakeholders at the concluding session today of the four-day Energy Summit at the SMX Conference Hall of SM Mall of Asia in Pasay City.
Upon receiving a copy of the output of the Energy Summit from Energy Secretary Angelo Reyes, the President ordered the Department of Energy (DOE) to effect the full and immediate implementation of the open access and retail competition in the power sector in a move to lower the cost of energy to ensure industry competitiveness and protect the welfare of consumers.
The President also directed that:
The Department of Trade and Industry (DTI) petition the Energy Regulatory Board to prohibit Meralco from charging system losses, and to stick to the 12 percent and not 16 percent rate of return of investment (RORI).
Directed former Energy Secretary Vince Perez and Trade Secretary Peter Favila to urge individual players and government to cooperate on how to implement open access now.
Ask Napocor to sell electricity to Meralco based on the same rate that the former is charging Luzon electric cooperatives. The President noted that Meralco buys from Whole Sale Electricity Market or WSEM during peak hours.
Instructed DTI to direct Meralco not to buy from WSEM during peak hours as rates are enormous.
As to the recommendation of the Summit to scrap the value added tax (VAT) on electricity, the President said such a move would need legislation. For the immediate relief of consumers, instead of scrapping of the VAT on electricity, discount coupons on electric bills would be distributed to the poor.
"VAT reduction would need legislation; why not a VAT refund?" the President said.
The money would come from government's share in the Malampaya oil drilling project and privatization of Transco. "We had much more than we asked," the President said, referring to the proceeds from the sale of the Transco assets.
Reyes said the Energy Summit has come up with several recommendations and action plans on how the country's economy could ride out the storm posed by the slowdown in the United States economy.
The Energy Summit opened on Jan. 29. The meeting continued on Jan. 30 and 31. As earlier agreed upon, the concluding session was held today. (OPS) [top]