Business group warns vs higher power rates with coal tax hike


Posted at Dec 04 2017 03:11 PM | Updated as of Dec 04 2017 04:06 PM

MANILA - A business group on Monday warned against causing power prices to go up after Senators raised duties on coal in their version of tax reform.

Senators proposed raising the excise tax on coal to P100 per metric ton in 2018, P200 in 2019, and P300 by 2020 from the current P10. Coal accounts for rough one-third of the country's installed capacity, according to government data.

Increasing the tax on coal could lead to higher power costs in the country, which are already some of the highest in Asia, Philippine Chamber of Commerce and Industry president George Barcelon said.

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"Any increase in our already uncompetitive power cost power cost should be avoided," he said in a statement.

"Being already poorly situated in terms of power costs competitiveness, it is important to give priority the prevention or avoidance of any cause that will increase the cost and diminish the quality of our power industry," he said. 

The business group added that "coal-fired power source, with its improving technology, is the best in achieving that average and reliable power supply." 
Some energy analysts however said the rising cost of coal on the world market, coupled with the sharp drop in the cost of renewable energy sources like solar and wind, makes the shift to green energy more viable.

Senators are meeting with their counterparts from the House of Representatives to reconcile their respective versions of tax reform.

President Rodrigo Duterte is seeking higher duties on fuel and cars and the removal of some tax exemptions to offset a reduction in personal income tax rates.