No End in Sight to the Energy Crisis That Plagues the Philippines

The rolling power outages still bedevil the country, raising concerns about the sustainability of one of Asia’s fastest-growing economies

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CHARISM SAYAT / AFP / Getty Images

Employees of an electronics shop rest outside their shop during a power cut in Legazpi City, in the Philippines' Albay province, on July 31, 2013

Correction issued: Aug. 6, 2013

For as long as she can remember, electricity has been a luxury to 39-year-old Candace Evangelista. Living in the Philippine capital of Manila, the small-business owner remembers the days when her parents would struggle to prepare food and get household chores done with a sporadic power supply. More than 20 years later, she faces the same tribulations. “Now that I am a mom myself — that’s when you really feel it, how inconvenient it can really be.” Preparing meals for her family is a tough job without electricity. Cleaning up afterward is another ordeal. Her business, a tutorial center for schoolchildren, suffers as well. In the summertime, it becomes a sauna when the power fails, so enrollment plummets. The center has a diesel-powered generator for use during scheduled outages or brownouts, but it’s becoming expensive to run.

Like most Filipinos, Evangelista never dreamed that the rolling power outages that crippled the Philippines in the early 1990s under then President Cory Aquino would still bedevil the country. But they have, raising concerns about the sustainability of one of Asia’s fastest-growing economies. In May, at the start of a sweltering summer, Luzon — the Philippines’ largest island and the hub of the nation’s commercial and industrial activity — suddenly blacked out. Six power plants failed. Last month, Albay province’s 1.2 million people lost power for 39 hours  because the local electricity provider, Albay Electric Cooperative, failed to settle its bill with the national power-grid operator. The $93 million sum had been outstanding for 15 years. On Friday, a brownout was announced throughout Misamis Occidental province (as has been done over 200 times since January). The next one: Pampanga, one of the richest provinces, which will lose power on Wednesday for eight hours. Consumers suffer and so do businesses that have to pay workers when machinery and premises are sitting idle.

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The Philippines, a 7,107-island archipelago, has around 30 million more people than Thailand, but doesn’t even produce half the electricity. That shouldn’t be the case. In terms of geothermal-power capacity, the Philippines is second only to the U.S., but transmission and distribution failures, the lack of domestic energy production and a challenging geography have meant a perennial power problem. The dependence on imported fuel hasn’t helped either. The government does not, in general, subsidize fuel, which means that electricity tariffs are set by the market and are thus among the highest in the region. Throw aging power plants and rogue debt-ridden cooperatives into the mix, and the likelihood of blackouts becomes virtually a hundred percent.

Then ambitious Electric Power Industry Reform Act (EPIRA) of 2001 was meant to provide some relief, but its effectiveness has been negligible. The law mandated the privatization of state-owned power enterprises, ensuring access to affordable electricity and allowing “a regime of free and fair competition,” among other things. However, an inadequate legal framework — like weak competition laws, which have resulted in the abuse of market power — and an ineffective regulatory body have made it a toothless piece of legislation. “Everything was supposed to happen at a much faster pace than what has actually happened,” Sohail Hasnie, an energy specialist at the Asian Development Bank tells TIME.

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The urgency stems from the country’s impressive rates of growth (the Philippines’ GDP growth rate of 7.8% for the first quarter of 2013 was the highest in Asia), which has driven up the need for energy. Secretary of Energy Carlos Jericho Petilla tells TIME that the power supply is “just keeping up with the demand” and that the situation will improve in 2015 when a slew of larger power plants come online. The country has also come up with short-term restorative measures, which should help tide over supply shortages for the next few months — last month, for instance, $100 million was earmarked to subsidize modular electricity-generator sets for regional cooperatives. And despite its promarket stance, the government may amend EPIRA to allow it to intervene in the sector as need arises. Petilla says the government would like to have its own power-generation facilities, for instance, so that it can bridge power shortfalls, when needed. “That stopgap ability is going to be expensive; no private sector [investor] will be willing to take that [on].”

But it’s the long-term, rather than near-term, that gives real cause for concern. According to a recent Goldman Sachs report, the investment needed to set up modern power generation in the Philippines over the next few years totals some $46 billion. Yet investors are shying away because, in the words of Control Risks analyst Stephen Norris, “politically connected domestic conglomerates” hold sway and nepotism rules. Foreign investment is capped at 40%, another inhibiting factor. “There are not many takers,” Norris says.

Until there are, Filipinos will struggle on with what has become a way of life. At a speech on June 23, 1992, President Cory Aquino reflected on development in her country. “The self-respect of the Filipino nation,” she said, would be reinforced by strong institutions “ensuring that our infrastructure, specifically our power-generation facilities, are adequate to cope with increasing demands of industry.” It is now up to her son and current President, Benigno Aquino III,  to deliver on those aspirations. Till then, Evangelista says, “we’re bracing ourselves,” and her kids are learning to cope with the lack of stable electricity, just as she did. “It’s going to be part of their daily lives as they grow up.”

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An earlier version of the story incorrectly stated that the Philippines’ population was 30 million fewer than that of Thailand, when in fact the inverse is true. The text has been amended accordingly.

69 comments
elmodedude
elmodedude

@MattFosterPR aha but did you not see the ten things to do? I read that one a while back. It's good

markcojuangco
markcojuangco

@the_nutbox To bring Kuryente prices down over time!: They haven't a clue or a plan J ! Run BNPP Now!

rstotler
rstotler

@TIME @TIMEWorld Why not subsidize building wind turbines or solar panels? Help them become self sufficient.

Fernando Encluna
Fernando Encluna

a pathetic picture of a country under Arab oil captive customers!

Valiant Vasquez
Valiant Vasquez

corruption yes but much of the population ends up going overseas anyways

Valiant Vasquez
Valiant Vasquez

here is the answer....think tanks and scientists there lets get started!

Sagie78
Sagie78

@TIME want you none in a Hugh wing.' Congrats., Egypt abt luca Brazzi?

Mitch Michelle
Mitch Michelle

Correct. Population control sana. Dahil makabuang ang traffic. Kahit Gaano ka pa kayaman o ka elegante sira ang beauty dahil pagpunta mo Lang sa mall pila ka na. Kakain ka ng lunch sa Jolibee 1 hour wait.

Efren C. Austria
Efren C. Austria

too much peoples..not much power supply..they love blackout anyway..make more babies

Dionesio Escaran
Dionesio Escaran

nako po ganyan talaga pag hinde mapag katiwalaan ang namumuno gayahin nyo ang mayor namin sa POLOMOLOK south cotabato serch nyo ang bayan namin kung gaanu ka responsable ang mayor namin pinaganda ang bayan namin inayos lahat ng public na lugar tulad ng palengke stadium napaka laki ovalplaza ang isang simpleng bayan nuon ay isa ng ganap na city dahil sa kanya i proud of you MAYOR ED LUMAYAG OF POLOMOLOK SOUTH COTABATO

don_koh
don_koh

Also keep in mind that Thailand has greater than 2x (twice) the per capita GDP.  That would likely have some influence on things, such as a nation's energy consumption and demand.

That being said, it could be a vision that Pilipinas needs a 25-30 yr national strategy to seek global investment and world financing with the strategic objective to develop and be world LEADER in Ocean and sea-power electricity GWh production.

Think about it for a minute.  With 7,000+ islands and addition of nearby reef and shoals in the geographical location she is...well, that my friend is a very very substantial capacity for mother nature's future wonderful blessings in form of abundant renewable power generation and exploitation.  Yes, Philippines can be the Saudi Arabia of green energy.

What to do with all this future excess electricity?  Why not think empowering a future nation of 'made-in-Pilipinas' plug-in electric scooters and vehicles for starters...something which might be good for air quality and reduced health costs as a bonus, too!

What else??  How about envisioning strategically located off-shore battery-recharging stations (or barges) for future Electric-hybrid powered Ocean-going cargo and transport shipping...en-route trans-Pacific, the Arctic region, Southward, or West to India, Middle-East, Africa and Europe!  And why stop there; why not jointly build these future classes of Electric-hybrid ships in consortium with ship-building partners such as Korea, Spain and Turkey as well?!?  Although, increasing such future industrial production would require added electrical supply, hmmm.

RaphaelLagdameo
RaphaelLagdameo

LOLS I ,like how a cease and desist order was slapped on a 600 mw power plant because of eco-activist....

WalterZiobro
WalterZiobro

"The Philippines, a 7,107-island archipelago, has 30 million fewer people than Thailand yet doesn’t even produce half the electricity"

Actually, the Philippines has 30 million MORE people than Thailand.

Zal Uyeuthe
Zal Uyeuthe

"The Philippines, a 7,107-island archipelago, has 30 million fewer people than Thailand yet doesn’t even produce half the electricity" - I think you mean more, right?! The Philippines has a bigger population than Thailand. Check your reference.

Pierre Bien-aimee
Pierre Bien-aimee

I'm guessing the writer is not Filipino? Saddens me that a foreigner has to be the one to point out what's wrong with the Philippines. What hurts most ismthat the article is true, well written as it is constructive. I can't defend my country against the haters/non-constructivists here in this thread. You have a point. But you have something to benefit from the corruption some Phillipine government officials do. The hard earned taxes of the poor Filipinosmare being plundered into foreign countries by the government officials and their families eith their lavish and greedy lifestyles in these countries. Talk about a big boost in your economy. By the way, I hope the writer has no ulterior motive in writing about the endless wooes in the Philippines (i think he wrote another one). The Philippine economy is slowly rising and I can imagine that other countries would not like this to happen so...well, you know what I mean.

LisaJones1
LisaJones1

Six power plants failed?  ... I know this trick = ENRON in USA 2001 ... Have fake fails or shut down for un-needed maintenance ... The electric prices go up and the company makes even more money ... Your being suckered Philippines!

Tony John
Tony John

Many of Asia's leading economies are nourished with the forex remittances from its non-resident working class. Imagine the growth these economies can attain if the government wasn't inefficient? Sad indeed.

Carlos A. Martinez
Carlos A. Martinez

Do they have access to the sun oh wait empower poor people is so not the American thing to do.

link2shah
link2shah

@OmarWaraich @KESCwala Rain & floods play havoc but we can't store them to use for hydro electric that cost hardly 20% of oil produced elc

Robert Cassetty
Robert Cassetty

Corruption + unchecked population growth = problems. Overthrow the government and quit screwing and you will be fine.

Fukiko Makoto
Fukiko Makoto

and the media and noytards/yellowtards be like: "It's more fun in the Philippines!!!"

Christa Ong
Christa Ong

So we must give respect to our dear Philippines.

daxlucas
daxlucas

@bingkimpo Well, if there's noise from abroad, i guess we'll get off our butts now. :P

tadasolo
tadasolo

@rstotler @TIME @TIMEWorld Philippines is a tropical country not a desert where wind and solar come hand in hand. 

don_koh
don_koh

@RaphaelLagdameo 

What kind of electric power generation plant?  Coal is not necessarily/automatically a positive source for local health and environmental reasons, if that was the actual type plant being mentioned here.  Not to mention, Ph needs to IMPORT the coal!!

cheekygadfly
cheekygadfly

LOL. A simple fact check would have prevented the error. Nicely done, Time editors.

don_koh
don_koh

@LisaJones1 

Hey Lisa....  Enron went OUT OF BUSINESS due to unsustainable operations and Enron execs were sentenced to jail!

That was NOT some kind of smart business trick!!  It was an epic industrial and business disaster!  Poorly managed and fraudulent.

FlorenceGayeDianala
FlorenceGayeDianala

because our gov't actually sucks too... it's a shame but it's freakin' true!

LisaJones1
LisaJones1

@podonkoh @LisaJones1  When companies have a Monopoly on a product such as electricity they come up with gimmicks to decrease supply to increase profits. They are shutting down shipping electricity and will take that small short term loss so they can raise prices and make even more money in the future. Fraudulent reasons to keep supply hard to come by. The only fix is when the Philippines let's outside investors come in and have a second and third source for electricity. Competition!