Power outages threaten Philippine economy - business group

Agence France-Presse

Posted at Oct 10 2010 06:28 PM | Updated as of Oct 11 2010 02:28 AM

MANILA, Philippines - The Philippines' biggest business group on Sunday warned of more crippling power outages unless plants were upgraded and more investment in the sector was allowed to go ahead.

The country early this year experienced a wave of daily power outages as power plants broke down and a drought caused by the El Niño weather phenomenon dried up dams that power hydro-electricity plants.

The Philippine Chamber of Commerce and Industry said official figures from the energy department showed that total power demand was growing by 4.9 percent annually on the heavily urbanized main island of Luzon.

Demand in the central region of Visayas and the southern island of Mindanao was growing at 4.6 percent annually.

The country now faces a "critical power shortfall of 600 megawatts until 2013" with no new power plants expected to go online until then, the Chamber said.

It said in the Visayas region peak demand had reached 1,298 megawatts whereas dependable capacity was only at 971 megawatts, leading to a deficit, while Mindanao was in the same situation.

This year's disruption took a heavy toll on businesses, forcing government to declare a "state of calamity" in parts of the south.

"There are big players willing to invest in power generation plants but they are not assured of viable buyers and decent returns," Chamber president Francis Chua said.

He said government should identify alternatives and contingency measures, including a review of regulatory powers to allow more firms to come into the sector.