Businessmirror june 18, 2017

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Stakeholders highlight need to keep Epira, with some provisions revised

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Shakeup in energy sector

By Lenie Lectura

ixteen years since the Electric Power Industry Reform Act (Epira) of 2001 was enacted into law, industry stakeholders observed more private-sector involvement in the energy industry, ushering in new power projects that boosted the country’s power supply, ultimately benefiting consumers.

“Epira came in June 2001. Maybe, from the start, it was going slow. But from my personal observation, there’s a lot of power projects that came on stream for the last three or four years, [and] a lot of capacity still coming on stream. Not bad at all, because it takes years to put to bed a power project,” Emmanuel de Dios, GE Philippines CEO and formerly Department of Energy (DOE) undersecretary, said in an interview. Based on the 2016 Philippine Electricity demand-supply data from the DOE, there are 5,068 megawatts (MW) of committed power projects, some of which are currently under way, and some 18,225 MW of indicative power projects that could take off in the future. AboitizPower President Antonio Moraza noted how Epira has helped improved the country’s power supply. “I think Epira has been very effective. The government is no longer guaranteeing take-or-pay contracts. It also has freed balance sheet so it can use resources for other areas of development. Prices have come down. We now have ample supply. Plants that were privatized have now been rehabilitated and now more efficient and reliable,” he said in a text message.

Mhryciw | Dreamstime.com

Continued on A2

18,225 MW The indicative capacity of power projects that could take off in the future

Tetangco’s last move to show his steady hand, but with surprises

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By Bianca Cuaresma

n June 22 the Monetary Board (MB) will be having its fourth monetary-policy meeting of the year, and while analysts and economists concur that the Central Bank will likely retain status quo on its monetary-policy stance on Thursday—as they have done since 2014— the Bangko Sentral ng Pilipinas’s (BSP) next policy meeting is still being carefully watched by markets, as it will be outgoing Governor Amando M. Tetangco Jr.’s last MB meeting as Central Bank chief. PESO exchange rates n US 49.5250

Singapore-based DBS Bank economist Gundy Cahyadi said the Central Bank governor’s last move is likely to maintain all policy rates on hold, owing largely to stable and within-target inflation over the policy horizon. Cahyadi further said that while they revised their inflation forecasts to reflect slightly higher numbers at 3.2 percent for both this year and the next—from 2.8 percent and 3 percent, respectively—both are still well within the government’s target range of 2 percent to 4 percent. The economist attributed the higher inflation outlook to increases in food and transport prices, and that transport inflation is set to rise further toward the year, plus the low-base effects in 2016.

Second-round effects are also expected from the increased levies under the tax-reform bill. Cahyadi’s statement echoes the governor’s latest statements on monetary policy, saying the BSP need not match the pace of normalization of interest rates seen in the United States. “There are idiosyncratic conditions that, of course, we have to take into account. I mean, there are many things like inflation; we are an inflation targeter, so that is the most important consideration for us. There was some deceleration in inflation rate for May, so we will take that into account. We will reestimate our inflation forecast when we meet again next week and see if there has been a change in Continued on A2

Tetangco

Abram Wainwright/Bloomberg

n japan 0.4465 n UK 63.1741 n HK 6.3481 n CHINA 7.2724 n singapore 35.7995 n australia 37.5201 n EU 55.2055 n SAUDI arabia 13.2081

Source: BSP (16 June 2017 )


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