DAVAO CITY – Davao City councilors have expressed strong reservations on the proposed Pax Silica industrial hub, warning that neither Davao City nor the Philippines currently has the capacity to support the high-tech development.

Councilor Louie John Bonguyan, chairperson of the Committee on Energy and Water, said key infrastructure bottlenecks present immediate hurdles to the proposal.

"It is not yet ready here in Davao City. Maybe in the future, but as of now, we're still not ready for that," Bonguyan said during the Pulong-Pulong sa Dabawenyos at Sangguniang Panglungsod on Aug. 4.

Bonguyan acknowledged the hub's potential to generate tax revenues and create job opportunities and noted that current national utility grids lack sufficient electricity and water reserves to sustain the facility's demands.

Councilor Luna Acosta, chairperson of the Committee on Peace and Public Safety, argued that allocating public funds toward the project misaligns with urgent national priorities.

"The millions of pesos that would be used to fund the Pax Silica would be better spent on improving the lives of Filipinos, for example, by increasing support for agriculture and tourism," Acosta said.

She added that focusing on information technology and cybersecurity, which are not among the country's most pressing matters at the moment, may divert attention and resources from more urgent national concerns.

Acosta also highlighted potential risks surrounding national cybersecurity readiness and diplomatic implications, cautioning that neighboring countries might view the facility as a security threat.

The proposed Pax Silica industrial hub, integrated under the Luzon Economic Corridor initiative, was highlighted by President Ferdinand R. Marcos Jr. during his fifth State-of-the-Nation Address.

Marcos said the industrial hub will serve as a vehicle to elevate the country's role in global technology and artificial intelligence supply chains.

Projected investments are estimated at $40 billion to $70 billion, alongside the creation of approximately 190,000 jobs in semiconductor and critical mineral manufacturing.

Meanwhile, the Mindanao Development Authority welcomed on Thursday, Aug. 6, the Davao City Council's call for a stronger collaboration to address high electricity prices, saying it shares concerns over the impact of rising power costs on households, businesses, and the region's economy.

MinDA Secretary Leo Tereso Magno acknowledged the concern raised by Councilor Danilo Dayanghirang and the city council, stressing the need for closer coordination among government agencies, local governments, regulators, distribution utilities, and other power industry stakeholders.

"MinDA has consistently pushed for cost-effective electricity and long-term energy security as key priorities for Mindanao," Magno said.

He said the agency has long advocated not only additional power generation capacity but also stronger transmission infrastructure, faster renewable energy investments, and better coordination among concerned agencies to help lower electricity costs over the long term.

Magno noted that although Mindanao currently has excess power supply, electricity rates are affected by several factors beyond available capacity.

These include prices in the Wholesale Electricity Spot Market, fuel costs, the generation mix, scheduled and forced power plant outages, transmission constraints, and market dispatch, all of which influence the generation charge reflected in consumers' monthly electricity bills.

"MinDA has consistently maintained that energy security and affordable electricity must be pursued together," Magno said.

Magno said distribution utilities should explore additional long-term power supply agreements where these are commercially viable, legally compliant, and beneficial to consumers.

He said stable and competitively priced baseload power, combined with the accelerated integration of renewable energy and battery energy storage systems, would help stabilize electricity prices and reduce exposure to WESM price fluctuations.

Magno said the agency is also pursuing long-term reforms to strengthen Mindanao's energy sector and reduce power costs.

These include accelerating the rehabilitation of the Agus-Pulangi Hydropower Complex, supporting the timely completion of committed power projects, strengthening transmission infrastructure to ease grid congestion, facilitating investments through the Mindanao Green Energy Auction Program, and promoting alternative energy technologies such as bioenergy, waste-to-energy, battery energy storage systems, and distributed renewable energy resources.

Meanwhile, Davao Light and Power Co. Inc. is in talks with Therma South Inc. to secure 20 megawatts of additional power through an emergency power supply agreement to reduce its reliance on the costly Wholesale Electricity Spot Market.

DLPC President and Chief Operating Officer Henriczar Tia said the proposed agreement could be implemented within one to two months, subject to approval by the Energy Regulatory Commission and the Department of Energy.

According to Tia, the move follows the Davao City Council's call for DLPC to secure additional power supply outside the volatile spot market amid high electricity rates. He added that EPSA would help reduce Davao Light's dependence on WESM.

Tia said the recent increase in Davao's electricity rate was mainly due to higher WESM prices following outages, maintenance shutdowns, and earthquake-related damage at several power plants in Luzon, Visayas, and Mindanao.

"With available supply tightening while demand remained steady, WESM prices increased, resulting in a P0.78 per kilowatt-hour increase in the residential rate, from about P12.30 to P13.09 per kWh," Tia said during the City Council's session on Tuesday.

Aside from the proposed EPSA with TSI, Tia said Davao Light is set to receive an additional 25 MW allocation from the Power Sector Assets and Liabilities Management Corp., comprising 16 MW of firm capacity and 9 MW of non-firm capacity.

He said the additional supply could help reduce electricity rates because PSALM is among the utility's cheaper power sources in Mindanao. He added that the additional allocation will help reduce the rates.

DLPC spokesperson Fermin Edillon said consumers should consider both the electricity rate and their actual power use when assessing their monthly bills.

Edillon encouraged households to limit the use of high-power appliances, such as air-conditioners, water dispensers, and cooking equipment, as these can significantly increase electricity consumption and monthly bills.