Commentary: Mindanao power is more expensive than Asia’s major cities

A RADICAL’S NUT

By Arnold J. Padilla

Mindanao power is more expensive than electricity rates in major cities in Asia but Aquino wants the region to pay more to supposedly address its power crisis (Photo from manilastandardtoday.com)

Mindanao must pay more to end the rotating brownouts, the President declared in his Power Summit speech. The region, said Aquino, needs more power supply but “cheap” power rates are discouraging private investors from building new power plants to meet Mindanao’s growing energy needs.Pay more “But how can you entice anyone to invest—and this is the question—if their generating cost is more than their selling cost?” Aquino, in his speech, asked. “The simple truth is: we can have a lot more energy, but we have to provide the incentives for businesses to come here to put up those plants. Therefore, there will be a change in what we have to pay. We will have to pay, perhaps, a bit more… You have to pay more because this is the reality of economics… Everything has its price. We have to pay a real price for a real service. There are actually just only two choices: pay a little more for energy, or live with the lack of energy and the continuation of the rotating brownouts.”
Cheap rates?
Aquino must apologize to the people of Mindanao for blaming them for the power crisis and accusing them of being spoiled by “cheap” power rates. Aquino must apologize for being shamelessly insensitive to the plight of Mindanao where 36% of the country’s poorest families live (based on the latest official poverty statistics released by the National Statistical Coordination Board or NSCB).
The premise that Mindanao has been unjustifiably enjoying “cheap” power rates is totally wrong. True, Mindanao has lower power rates than Luzon and Visayas. Latest available comparative data show that the region has an effective residential rate of P6.69 per kilowatt-hour (kWh). Luzon has P9.84 while Visayas has P8.19. (Data from 18^th EPIRA Implementation Status Report, which may be downloaded here)
Most expensive in Asia
Aquino, however, did not mention one very important fact. Mindanao power is “cheap” only because the country has the highest electricity rates in Asia. In a survey conducted by the Japan External Trade Organization (JETRO), Manila posted the most expensive residential rate (P10.16 per kWh), while Cebu (P8.39) is ranked third (Singapore ranked second with P8.83). JETRO conducted the survey in January 2011 to compare investment-related costs, including electricity, in 31 major cities in Asia and Oceania. (See the table at the end of this article for the complete list; Download the JETRO survey here)
While Aquino is blaming the power crisis on the people of Mindanao for being pampered by “cheap” power, Mindanao is actually paying much more than most major cities in Asia. Did you know that residential consumers in the Autonomous Region in Muslim Mindanao (ARMM), Cagayan de Oro City, Northern Mindanao, and the Davao and CARAGA regions are paying twice the electricity rates of residents in Seoul and Beijing? Except for CARAGA, all the Mindanao regions I mentioned also have more expensive residential power rates than Hong Kong. These areas in Mindanao, plus Cotabato City, Iligan City, SOCCKSARGEN, and the Zamboanga Peninsula all have higher residential rates than major Asian capitals like Taipei, Kuala Lumpur, Jakarta, New Delhi, Bangkok, and Shanghai, among others. All in all, Mindanao is paying an average of P1.82 per kWh more for electricity than the collective average residential rate of the 31 major cities in Asia and Oceania surveyed by JETRO.
I summarized these findings in the chart below, which culled data on residential rates from the JETRO survey and data on average residential rates of private distribution utilities (PDUs) and average systems rates of electric cooperatives (ECs) from the 18^th EPIRA report. The red bars represent Mindanao regions and cities.

Poorest region
Note that Mindanao has an average official poverty incidence of 33.5% of families (the national average is 20.9%). The country’s three poorest regions are in Mindanao – CARAGA (39.8%), ARMM (38.1%), and Zamboanga Peninsula (36.6%). ARMM does not only have the most expensive power rates in Mindanao, it also has (consequently) the highest cost of living (more than P1,287 based on the family living wage released by the NSCB in July 2008) among all regions in the Philippines, while the minimum wage there is just P232 (or just 18% of the cost of living). Amid this condition, the people of Mindanao are being forced to pay for electricity that is way beyond the rates in Asia’s richest cities. Yet Aquino wants Mindanao to shell out more money to supposedly solve its power crisis.
Blame EPIRA
Mindanao has lower rates than Luzon and Visayas not only because it sources its energy supply from cheaper hydropower but also because the region has been relatively and temporarily spared from the privatization and deregulation drive under EPIRA. State-controlled/owned installed capacity in Mindanao is still about 82% of the total (as of 2010 data from the DOE), compared to 18% in Luzon and 36% in Visayas where most power plants have already been privatized and are now controlled by the country’s profit-seeking “power lords”. Furthermore, unlike Luzon and Visayas, Mindanao does not have an EPIRA-created wholesale electricity spot market (WESM), which has only become a venue for price manipulation and speculation by power monopolies, sparking off wild spikes in power rates.
But EPIRA is also to blame for Mindanao’s energy insecurity. While government retained control over most of the installed and dependable capacity in Mindanao, it did not invest in additional capacity to meet the growing power demand of the region. Government abandoned its strategic role to design and implement power development projects consistent with a long-term industrialization plan and instead focused on selling the assets of the National Power Corporation (NAPOCOR) to private investors as mandated under EPIRA.
Reverse privatization
To fully solve the energy insecurity of Mindanao and the rest of the country as well as the problem of expensive electricity, there is no other recourse but for the state to take over. Aquino could no longer use the excuse that doing so will just further bankrupt the government. Despite the EPIRA, NAPOCOR remains trapped in deep debt (read here). So instead of further wasting limited public resources on a flawed energy program – which only made electricity bills more exorbitant and power supply more insecure – government should start reversing the privatization and deregulation of the energy sector. #

NDF-Philippines ON PRESIDENT AQUINO’S MINING POLICY

Press Statement

09 July 2012

 

THE RAPID EXPANSION OF MINING AND PLANTATIONS OWNED BY IMPERIALISTS AND THE RULING CLASS MEANS CALAMITIES AND WAR IN MINDANAO

Military operations in Mindanao have escalated and have become more extensive with the aim to thwart the ever growing and widespread people’s protest against destructive mining operations and plantations owned by imperialists, the big comprador bourgeois and big landlords.  After having ravaged the environment by way of wanton logging, imperialists and the local ruling clique insidiously intend to inflict even greater devastation to the environment; and, to deprive, oppress and exploit further the Lumads, Moro, peasants and workers in order to satiate their greed for superprofit.

In Far Southern Mindanao, the opposition of the B’laan and Moro peoples, the religious, peasants and irrigators’ cooperatives, the local government, and the people in general against Xstrata-SMI — the largest gold mining operation in Southeast Asia, covering 90,000 hectares in the quadri-boundary of South Cotabato, Sultan Kudarat, Davao del Sur and Saranggani, corpulent with a capitalization of US$5.9 billion — has gained strength and broadened.  Suffering from blatant and relentless violations by the Xstrata-SMI against their ancestral domain, the B’laan Lumads have been pushed to wage a “Red Pangayaw” (Tribal War) against Xstrata-SMI, as well as against the security guards, Army, CAFGU and PNP protecting the company.  On June 20, their ambush resulted in the demise of Chief Security Ret. Police Supt. Villamindo Hectin and of PO2 Rey Tonzo, and the wounding of SPO1 Wenefredo Sengonnigue and PO1 Glen Beltran.  In the second ambush that took place the same day in Makak, Brgy. Kiblawan, North Cotabato, one official of the 1002nd Brigade and 2 CAFGUs were wounded.

These were followed by an ambush on June 26 launched by the B’laan in Kimlawis, Kiblawan, where PO Yolly Jean Singkolan was killed in the course of combat.   In 1995, the Western Mining Company, the first to bring large-scale mining to Tampakan, was compelled to abandon their operations when the B’laan Lumads waged a “Revolutionary Pangayaw” against the company. In January of 2008, the NPA dismantled the administration office of the Xstrata-SMI in Tampakan, South Cotabato, and in the following year, the NPA raided the Tampakan PNP protecting the company.

In the Southern Mindanao Region, where numerous imperialist mining companies operate such as the Russell Mines and Minerals, Apex Mining Corp. and Philco, the people’s protest against large-scale mining is also strong and wide.  In the past, small-scale miners’ associations launched, in several occasions, protest actions against an imperialist mining company which, together with its local partners, aimed to grab from the small-scale miners the very source of gold in Diwalwal, Monkayo, Compostela Valley.  There were also several instances in the region where the NPA sanctioned highly destructive mining operations as well as militarily targeted units of the AFP, CAFGU, PNP and other security forces actively protecting large-scale mining companies.

In North Central Mindanao, the opposition of Lumad peoples, especially the Manobos and the Matigsalogs, together with the peasants, church, LGU and other sectors against the mining operations of Indophil in Quezon and in San Fernando, Bukidnon is fast gaining ground; that is precisely why the 8th IB continues with its intensified military operations in the said area.   Currently, in the interest of mining companies, the 8th IB has forcibly placed under hamlet more than 100 peasant and Lumad families in Sitio Sikayab, Brgy. Bunacao, San Fernando, Bukidnon.  There is also strong people’s protest against the expansion of the Dolefil, DelMonte and Sumifru plantations, in whose areas the military, every now and then, conducts combat operations in order to secure these companies’ interests.  On the other hand, within two weeks alone, the NPA in the region has launched 5 tactical offensives against operating troops of the AFP, CAFGU and PNP.  One of these was the ambush conducted by the NPA on June 17 against operating 8th IB troops in Sikayab, Bunacao, San Fernando, Bukidnon, where 9 army personnel were killed-in-action (KIA) and 2 others wounded; the NPA sustained no casualty.

In Western Mindanao,  there is widespread opposition among the Subanen and Moro peoples, peasants and workers, church and the middle forces against  military operations conducted by the Tabak Division of the Army aimed at crushing people’s dissent against the ever-rising number of mining sites and operations of the Toronto Venture Inc. (TVI) in the entire region.  If one recalls, more than 400 families were forced to evacuate their ancestral lands because of TVI and the ruthless military operations that ensued to protect it in Buug, Zamboanga del Sur.  In order to defend the people’s human rights and general wellbeing, the NPA launched tactical offensives against TVI as well as against units of the AFP-PNP-CAFGU protecting it, such as the ambush on February 2012 that hit elements of the army intelligence group operating on the behest of TVI. The imposition of the local government to allow TVI mining operations on Subanen ancestral lands is one of the bases the NPA raided on April 9 the PNP station in Tigbao, Zamboanga del Sur.

In Caraga, where the number of mining companies is most concentrated, a stronger and more far-reaching opposition led by the Lumads, church and local government groups and a broad range of people’s aggrupation against large-scale mining’s destructive effects, as well as against the ever-expanding Dolefil, Del Monte and Sumifru plantations, is at present gaining unprecedented groundswell.  Because of this, the military operations of various troop units from the 4th ID PA continue almost unabated, which has already resulted in massive evacuations and in the perpetration of brutal human rights violations against the people.  On the other hand, the NPA has already simultaneously sanctioned three giant mining companies in Claver, Surigao del Norte on October 3, 2011.  In the last two weeks alone, the NPA was able to launch 10 military actions against enemy troops protecting these mining companies and plantations.  One of these was the NPA attack on June 27 in Puog, Tandag City, against 29th IB troops, where 2Lt. Martinez was killed, and 2Lt. Gomez and Cpl. Cabahis were wounded.  The NPA was able to seize one M16 rifle.

And recently on July 6, the NPA in NEMR successfully sanctioned the VPO Mines, Inc. for maintaining a disproportionately large number of armed goons (with more than 60 high-powered rifles and other weapons) while wantonly operating in Brgy. Bayugan III, Rosario, Agusan del Sur. The NPA was able to confiscate 30 firearms from the company, which include the following: 13 HPRs (7 M16s, 2 M4 Carbine arm-a-lite rifles, 1 M203, 2 M14, 1 AK-47), 9 shotguns, 6 .45 Cal pistols, 2 .9mm-KG, and several ammunition.

In view of these events, the NDFP in Mindanao calls upon the Lumad and Moro peoples, peasants and workers, religious and other sectors to further strengthen their unity and their courage to oppose the interests of imperialist mines and plantations, which are exceedingly damaging to Mindanao, to its people and to the environment.  We call upon the units of the NPA in Mindanao to be ever more daring in their defense of people’s interests against the greed and rapacity of the local ruling classes and their imperialist master.

 

Ka Oris
Spokesperson
NDFP-Mindanao

President Aquino OKs Executive Order on mining

President Benigno “Noynoy” Aquino III has issued a new executive order aimed to strengthen the enforcement of environmental laws on mining.

Under the EO, the government has six months to develop “a national program and road-map, based on the Philippine Development Plan and a National Industrialization Plan, for the development of value-adding activities and downstream industries for strategic metallic ores.”
In the Executive Order No.79 released by Malacanang on Monday, the Department of Environment and National Resources “shall ensure that environmental standards in mining, as prescribed by the various mining and environmental laws, rules, and regulations, shall be fully and strictly enforced, and appropriate sanctions meted out against violators thereof.”
The order also identifies areas where mining will not be allowed such as areas under the National Tourism Development Plan, critical areas and island eco-systems, as well as agricultural and fisheries development zones.
According to a briefer from the office of Executive Secretary Paquito Ochoa Jr., no new permits will be granted for mining in Palawan.
“The ecological uniqueness of Palawan’s flora and fauna and the need to protect the same is recognized,” the Office of the Executive Secretary said.
Although existing mining operations will be allowed to continue, Congress must pass a law “rationalizing existing revenue sharing schemes and mechanisms” before any new mining agreement is granted, the EO said.
“The DENR may continue to grant and issue Exploration Permits under existing laws, rules, and guidelines. The grantees of such permits shall have the rights under the said laws, rules, and guidelines over the approved exploration area,” the EO said.
Grantees of the permits will also have the first option to develop the site as soon as Congress passes a law for revenue sharing.

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