DBM pumps Php 1.16-B into Ecozone power subsidy

The Department of Budget and Management announced the release of Php 1.166 billion to the Power Sector Assets and Liabilities Managament for the extension of its Memorandum of Agreement with the Manila Electric Company.

The release will support the MOA's funding requirements for Ecozone Special or Preferred Rates for Philippine Economic Zone Authority export manufacturing companies.

"The Php 1.16-billion release is in fulfillment of President Aquino's order to provide budgetary support for the MOA extension. By extending this assistance, the Administration will not only help key PEZA industries that are already established in the country. The energy subsidy will likewise encourage the influx of foreign investments and boost the Philippines' competitiveness vis-a-vis its neighbors," Budget and Management Secretary Florencio B. Abad said in a press release sent to PIA.

President Benigno S. Aquino III earlier approved the extension of the MOA between NPC/PSALM and MERALCO, pushing the agreement's validity until December 25, 2012 or until the effective implementation of the Retail Competition and Open Access, whichever comes first.

According to Abad, the DBM has already issued a Special Allotment Release Order in the amount of Php 1.16 billion, pursuant to the President's condition that payment of the electric subsidies be made by PSALM on a monthly basis.

Of the total release, PSALM has received a Notice of Cash Allocation worth Php 453.7 million covering the billing requirements for January-April 2012. For January to February, the DBM has released Php 175 million, while another Php 156.2 million will be used for the February-March billing. Meanwhile, the power subsidy for March-April will amount to Php 122.5 million.

Abad confirmed that the release will be charged against the Department of Energy's Special Account in the General Fund 151¬ – Malampaya Fund, as approved by President Aquino on May 21, 2012.

As of March 31, 2012, funds under the DOE Status of Special Account stood at Php 137.3 billion. The energy subsidies required by the MOA extension now brings the current balance to Php 97 billion.

"Through these measures, the Aquino administration intends to usher in more investment activity into the country. Electricity rates in the Philippines are already the highest in Asia, and we want to mitigate the cost of doing business here so that the country becomes more attractive to foreign investors. With more businesses setting up shop in the Philippines, the government will be better-positioned to open up more employment opportunities for Filipinos and, ultimately, stimulate long-term economic growth," Abad said. - PIA — ARA