Taking center stage at last week’s Kapihan sa Manila Hotel were two topics of immense importance, the “Big One” and the high cost of electricity.

Among the main reasons why the Philippines continues to lag behind its neighbors in terms of attracting foreign direct investments is the huge power costs. The fact that in the whole of Asia, our country has the third highest electricity rates undoubtedly dampens investors’ enthusiasm to set up shop here.

The Philippines charged P11.34 ($0.19) per kilowatt hour (kWh) in the last quarter of 2024, next to Japan which came in second at P11.80 ($0.201) per kWh, with Singapore ranking highest at ₱14 ($0.239) per kWh, according to GlobalPetrolPrices.com which tracks power rates in over 150 countries.

Dr. Fernando Martin "Nani" Roxas, president and CEO of National Power Corporation told the Kapihan forum the huge electricity rates in the Philippines can be attributed primarily to the cessation of government subsidy when the Electric Power Industry Reform Act (EPIRA) of 2001 took effect.

Unfortunately, Dr. Roxas said, after the 2001 law removed the subsidy, many forms of taxes arose – on generation, on transmission, on distribution, and on the retail usage of electricity – all contributing to skyrocketing costs.

He also pointed out that the country’s reliance on fossil fuel to run the power plants leads to our vulnerability to external economic forces amid fluctuations in global prices. He also lamented the logistical difficulties, ours being an archipelagic country, in the operations of around 260 power plants that supply electricity to some 120 islands.

What could be done to reduce cost of electricity? Dr. Roxas said plans are afoot to realize an ambitious vision: turn water lilies, a common aquatic nuisance in many places, into a source of bioethanol to reduce reliance on costly imported fuel. He said the technology to convert water lilies into fuel is available but the challenge lies in scaling up bioethanol production to energize the islands.

Regarding the many taxes now in place, there is an urgent need for the National Economic Development Authority and the Department of Finance to look into rationalization of taxes to bring down electricity costs. The DOF can help NEDA craft a strategy on how to streamline the taxing system on electricity. There ought to be a study that could lead to a strategic identification of the sectors needing subsidy, what level of taxes can be quite livable and which could help the country in being competitive compared to our neighbors.

On the natural calamities especially at this time when the rainy season has already set in, Atty. Chris Noel Bendijo, spokesperson for the Office of Civil Defense (OCD), told the Kapihan forum that his agency is fully prepared. He outlined the OCD’s multi-layered strategy: pre-emptive evacuations, stockpiling relief goods, strengthening communication systems, and ensuring communities respond swiftly when calamity strikes.

As to the “Big One” that can hit anytime, he stressed the importance of compliance to the national building code to withstand earthquakes. “There should be no shortcuts when it comes to securing building permits and ensuring structural integrity… Trying to save money today by cutting corners could cost you your life tomorrow,” he warned as he called on property owners and developers to retrofit structures especially in quake-prone areas.

The potential devastation of the “Big One” has been predicted in two scientific studies. The Greater Metro Manila Area Risk Analysis Project, funded by the Australian Agency for International Development, disclosed in 2013 that a 7.2 magnitude earthquake along the West Valley Fault “can cause collapse of structures within a span of 1,100 hectares that could kill 37,000 persons and cause P2.4 trillion in damage.”

The other study, the Metro Manila Impact Reduction Study, conducted from 2002 to 2004 by Philvolcs, Metro Manila Development Authority, and the Japan International Cooperation Agency, came up with similar terrifying projections: 35,000 deaths, 500 simultaneous fires in many buildings.

The grim scenarios portrayed by the two studies clearly show the need for urgent measures to mitigate destruction of unprecedented magnitude. Atty. Bendijo said that with increased population at present compared to the time the studies were made, there could be more casualties. Local government units must be in the forefront of disaster mitigation measures. ([email protected])