USAid: Imports driving power, fuel costs

The Philippines’ heavy reliance on foreign sources of energy is to blame for the high power and transport costs in the country, resulting in an “unfavorable investment climate” compared to some of its neighbors, according to the US Agency for International Development (USAid).

The United States government’s international aid agency, which celebrates today (Thursday) its 50th year of involvement in the country, said it was helping the “efforts of the Department of Energy (DOE) to pursue energy independence, rural electrification and power sector reforms.”

“Through a public-private alliance, USAid is providing renewable energy-powered electricity to thousands of households in remote, conflict-affected areas in Mindanao. It also provides technical assistance to the DOE and the Energy Regulatory Commission to implement reforms to encourage investments and protect consumers’ interests,” the US agency said in a report.

USAid said the Philippines needed assistance to address what it said were the four key challenges in the energy and environment sectors—competitiveness, corruption, conflict and conservation.

It said about 3 million households remain without electricity; half of the population lack access to piped water; weak enforcement of vehicle emission standards contribute to worsening air quality in major urban centers; and illegal and destructive fishing practices and conversion of forest lands threaten food security and productivity of the country’s marine and forest resources.

“Special attention is given to Mindanao, which has an extraordinary natural resource base that could make even greater contributions to national food security were it not for continuing violent conflict and weak governance which hinders sustainable development,” it said.

In a separate report on the economy, USAid said that despite its recent favorable performance, “the Philippine economy continues to lag behind the success of its Southeast Asian neighbors and there is much to be done to sustain and expand impact of development efforts.”

USAid said it would do its part by backing “economic reform efforts that focus on sustaining good fiscal sector performance and removing barriers to investment and competition.”

USAid “continues to provide support national and local government efforts to improve the business environment by reducing the processing time, steps and cost in obtaining a business permit for new and existing businesses,” the report said. Jerry E. Esplanada