Malampaya royalties should be used to cut electricity costs

MANILA, Philippines - Royalties from the Philippines’ Malampaya Gas to Power project, which provides a third of the country’s power needs, should be used to cut electricity costs, a group of electronics manufacturers said. The Philippine government should “put a portion of the funds to where it is supposed to go," said Arthur Young, chairman of the Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI). Young was referring to a provision in the Electric Power Industry Reform Act (EPIRA) which indicates that royalties collected from “the exploitation of all indigenous sources of energy including natural gas and geothermal steam" should be used to cut power costs. This will not only benefit SEIPI members—which produce the Philippines’ leading export—but all big electricity users, said Young, who represents the country’s largest organization of foreign and local semiconductor and electronics companies. Young also cited a study undertaken by University of the Philippines Professor Dante B. Canlas, the former chief of the National Economic and Development Authority (NEDA). Using natural gas royalties to cut power costs would stimulate economic growth since it will make local industries more competitive, the study said. “This will provide government additional tax and non-tax revenues, which would be more than sufficient to offset the foregone royalties collection in less than two years from implementation," the study said. Earlier, President Gloria Macapagal-Arroyo allotted P4 billion from Malampaya royalties to fund the country’s initiatives for rice self-sufficiency. But the SEIPI executive clarified that the group is “not against the program of the President to allocate part of the Malampaya proceeds for the country’s food sufficiency program." However, the government “should also allocate funds to help continue the drive to reduce energy costs," Young said. - GMANews.TV