Businessman Ramon S. Ang fearlessly tackled the issue of high electricity and fuel prices in the country compared to its neighbors during the Philippine Economic Briefing on Monday, May 27.
Ang, widely known as RSA, used the panel discussions at the forum, which included Budget Secretary Amenah Pangandaman, Finance Secretary Ralph Recto, and National Economic and Development Authority Secretary Arsenio Balisacan, to shed light on the underlying reasons for the country's elevated energy costs.
He pointed out that the primary reason for the higher energy costs locally is the absence of government subsidies, with taxes being levied on electricity and petroleum products instead.
As the chief of San Miguel Corp., the company behind Petron Corp., Ang pointed out that if Malaysia, Indonesia, and Thailand adopt comparable tax laws, it could result in lower fuel prices in the Philippines compared to these nations.
Ang further noted the disparity in the power sector, stating, "Our power generation costs are actually lower compared to those in neighboring countries. However, imposing taxes on the power sector and fuel without corresponding subsidies has resulted in higher power prices."
The government's inability to provide subsidies is attributed to the Philippines being a net oil importer, unlike countries such as Malaysia, Indonesia, Thailand, and Vietnam, Ang said.
RSA illustrated this point by highlighting, "Our oil production stands at 6,000 barrels per day, while our neighboring countries average one million barrels daily. This significant contrast is the reason why they can implement subsidies, whereas, in the Philippines, we lack domestic oil production."
Despite the challenges posed by the high local energy costs, Ang believes that this should not discourage foreign investors from exploring opportunities in the Philippines.
“You are welcome to establish your own power generation facilities within your factories, a process that is relatively straightforward. The Philippine government actively supports and encourages all major energy consumers to establish their own power infrastructure,” Ang said.
"For instance, if you plan to set up a nickel processing plant, you can establish your own power plant alongside it,” he concluded.