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power-shortage/

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IN ASIA
WEEKLY INSIGHTS AND ANALYSIS

Energy Crisis in the Philippines: An

Electricity or Presidential Power Shortage?
March 18, 2015
By Steven Rood
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As predicted, the Philippines is heading into a severe summer power crisis. One
peculiarity of the widespread use of English in the Philippines is the mismatch between
seasonal names and the months of the year. Leaves start falling from trees in March
is it autumn? No, trees are just preparing for the dead season not the long cold
nights of winter, but the long, hot dry days of summer: April and May. The Philippine
term for this period is literally the time of heat, but among English speakers this is
summer, rather to the bemusement of Americans who associate that term with June
through August.

The Philippines faces a looming energy crisis, and general concern for electricity supply (and price) has been a feature
in the Philippines for years. Photo/Flickr user Adam Cohn. http://bit.ly/1B17NNa
Thus the label summer brownouts for the impending power shortage expected to
descend on the Philippines in the next few weeks. Brownouts is another Filipinism
rather than referring to voltage reductions, it means power outages or blackouts.
Hydropower is reduced due to the seasonal dry spell, and a major gas production
facility supplying power plants will be shut down, so that electricity reserves will be
running lower low enough that a random tripping or shutdown of a power plant on
the grid might cause widespread outages. Or there may be more proactive
management of an electricity shortage, with rotating outages among localities a
practice that is fairly common in the southern island of Mindanao.
Those with long memories will remember that the Philippines has been here before, in
the (literally) dark days of the early 1990s under the administration of President Corazon
Aquino (the current presidents mother). The 1986 ouster of President Marcos led to the
cancellation of a controversial nuclear power plant, and no new capacity was built
leading to daylong outages that stalled the economy. The incoming Ramos
administration (1992-1998) solved the problem through emergency powers granted by
the 1991 Energy Crisis Act to conclude contracts for new power generation.
Those whose memories do not go back that far might know that this looming energy
crisis has been predicted for a year now, and general concern for electricity supply (and
price) has been a feature in the Philippines for years.
So why hasnt the governments response been more proactive? One answer is red
tape. The Department of Energy estimates that it takes 165 signatures and a minimum
of three years to secure the necessary permits (which can then be challenged,
and delayed, in court by local activists opposed to, say, coal power plants). Another is
reluctance of some investors in the face of contractual and pricing insecurity. In the last
decade, the previous Arroyo administration renegotiated the contracts made during the
energy crisis in the 1990s to try to get more favorable terms. And the Energy Regulatory
Commission has often been slow to approve cost recovery, delaying rate changes in the
face of increasing generation costs.
The main response to the predicted shortages has been the Interruptible Load
Program (ILP). This enrolls large establishments who have their own generators
(shopping malls, office buildings, factories) to voluntarily interrupt their power from the
main grid and start running their generators when a shortage is predicted. The concept
is that if an outage occurred they would have to do so anyway, so it is more socially and
economically beneficial to do this in a planned fashion. Though the details of
compensation its source and amount have not been finalized, many firms have
signed up. Some private sector economists feel this will be sufficient. Others are not so
sanguine, including the governments Department of Energy. Thus, last year, the
administration of President Noynoy Aquino requested a joint congressional
resolution granting him emergency powers for a limited time period to fast-track
contracts for new power generation. The proposal was controversial naturally the
political opposition was suspicious of increased presidential powers; some felt that since
the ILP was in place it was not necessary, and others recalled the Ramos example as
yielding high-priced power. In the event, Congress has not (as of this writing) passed
the resolutions both the Senate and House of Representatives passed a version, but
a conference committee has been unable to resolve differences.
This feeds into the discourse about a power shortage of another kind the allegedly
waning power of President Aquino. Last year there were controversies about pork barrel
funding through legislative-executive collaboration, and a flexible executive budgetary
process (the Disbursement Acceleration Program), both of which were declared
unconstitutional by the Supreme Court. Many warned that without these political tools
the presidents influence over the legislative process would be weakened.
Most recently there has been the constant controversy over the January 25 clash in
Mamasapano, Maguindanao, where 44 members of the Philippine National Police
Special Action Force were killed in an operation against the Malaysian terrorist Marwan.
Eighteen members of the Moro Islamic Liberation Front were killed in the incident, along
with five civilians. For six weeks now, controversies, multiple inquiries, and televised
Congressional hearings have dominated the headlines.
This week public opinion data showed that nationwide approval and trust of President
Aquino had taken a hit. Many take this as another sign that the president is weakened
 politically. What they do not take into account is that he is far more popular than was
President Gloria Macapagal-Arroyo at a similar point in her presidential term (15 months
before the end), and she remained a political force right up to the very last day of her
incumbency.
So, well have to see if the Philippines can avoid power outages this summer. But we
can confidently predict a President Aquino to be reckoned with until July 2016, when he
steps down.
Steven Rood is The Asia Foundations country representative in the Philippines. He
tweets @StevenRoodPH, and can be reached at steven.rood@asiafoundation.org. The
views and opinions expressed here are those of the author and not those of The Asia
Foundation.
RELATED LOCATIONS: Philippines
RELATED PROGRAMS: Conflict and Fragile Conditions, Elections, Environmental
Resilience, Strengthen Governance
RELATED TOPICS: Climate Change, Southern Philippines Conflict

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