Between January 28-30, bureaucrats, technocrats, researchers and academicians presented papers and reports before an assembly of colleagues, and the occasional stray mall rat, at Mall of Asia’s SMX Convention Center in Pasay City. For all intents and purposes, the Summit was a response to an earlier call by President Gloria Macapagal Arroyo to convene a “summit of energy stakeholders” to help cushion the potential adverse impact on the economy of the record rise on the price of crude oil.

The scope of topics included accelerating investments in oil and gas exploration, market and financial barriers to renewable energy, lower power rates for industry competitiveness and promoting energy efficiency and conservation. As the workshops and plenary sessions dragged on, unresolved issues in the power sector came up in the discussions as much as new prospects in safe, long-term energy sources.

Volatile issues

The volatility of the energy issue in the Philippine socio-political setting cannot be underestimated. A week after President Arroyo issued her call for an energy summit, Senators Miriam Santiago and Miguel Zubiri exchanged barbed words on the dire implications of the recently passed Biofuels Act. Sen. Santiago raised concerns that the full-scale cultivation of land-based biofuels sources could eventually compete for acreage with land devoted for food. She actually authored, sponsored and successfully steered the passage of the Biofuels Act but given the food vs. fuels debate underlining the development of biofuels, she appeared ready to give the renewable energy bill a stronger push.

First-time Senator Zubiri, author of the Biofuels Act when he was till a Congressman, felt alluded to when Santiago accused certain politicians of over-hyping the Biofuels Act “to burnish their image, thus misleading the public.” He challenged Santiago to a public debate on the issue, which the lady senator has yet to respond to. Zubiri went on to accuse oil companies of campaigning against the Arroyo administration’s program in an effort to block the development of biofuels, which competes with industrial oil products.

In December, 2007, the Spanish government committed $450 million in investments in biofuels production, sustainable fisheries development and aquaculture technology in Palawan and Quezon provinces. Spanish traders arrived in Puerto Princesa early this month to scout for possible sites to establish jatropha plantations and their associated biodiesel processing factory.

The participation of foreign capitalists and technology providers in the Summit and in the energy sector in general has become another source of irritant in the current debate on alternative fuel. Observers have noted that the Summit is funded by multilateral financing institutions such as the World Bank and the Asian Development Bank, the very same foreign banks that pressed in the 1990s for the Oil Deregulation Law which essentially abolished government subsidy on imported oil allowing its price to be dictated by international market trends.

Businesses hurting

Both large and small-scale businesses are hurting from the adverse impact of skyrocketing crude oil prices. The Philippine Exporters Confederation (Philexport), the country’s biggest grouping of domestic manufacturers, has perennially blamed the high cost of electricity to be a disincentive to export production. Today, aside from costly inputs, exporters have to contend with a stronger peso, which translates to higher-priced imported materials, and high power costs that discourage round-the-clock production, for instance, to meet volume production demanded by foreign buyers. Exports went down by 2 percent during the last quarter of 2007 and almost 10 percent of export enterprises have closed down due primarily to uncompetitive operations. Philexport submitted an action agenda to the Department of Energy to be taken up during the Energy Summit.

Three days after the closing of this year’s Energy Summit, the organizers led by Energy Department Sec. Angelo Reyes submitted a report to President Gloria Macapagal-Arroyo.

Among the proposals included in the Summit Report were fast-tracking the passage of the Renewable Energy Bill in Congress; promotion of energy efficiency in lighting, building designs and transportation; imposition of taxes on polluters; and the adoption of more scientific energy policies.

Acting on some of the proposals, President Gloria Macapagal-Arroyo issued a number directives intended to soften the impact of soaring oil prices in the world market. She ordered the Department of Energy to implement open access and retail competition in the power sector to ensure industry competitiveness leading to a lower cost of electricity to consumers. She also directed energy and trade officials to seek private sector cooperation in the implementation of open access to industrial power immediately.

The Summit Report highlighted the call to scrap the value added tax (VAT) on electricity. The President responded by noting that such a move would need legislation and instead offered VAT refund in the form of discount coupons on electric bills of the poor.

The Energy Summit Report and GMA’s response to its recommendations reflected the Pinoy’s fixation towards short-term palliatives even in addressing critical issues of national interest. There are options being forwarded by the scientific community, such as the full-scale development of infrastructure for biomass, wind and solar power yet the administration seems comfortable, with the politically expedient solution of discount coupons.

Rather than launch a serious program of improving the efficiency of power distribution and utilization in the industrial sector, government would rather open it up to other firms, most likely foreign operators, in the near term. The policy appears on paper to conflict with another guiding principle of national survival: that power is also a national security concern.

A side issue that has received scant attention in the power equation is population. More Filipinos accessing a limited power grid will certainly put a stress on its resources. Already, 80 million Filipinos are facing a looming power crisis by 2009. The big question right now is: Will the opportunities in alternative power sources come on stream in time? The occasional one-hour brown-outs these days hardly give a ray of hope.