Infrastructure-oriented think tank Infrawatch PH said candidates running for public office should brush up on economic policies and reconsider proposals such as the government takeover of public utilities which may not be feasible.
“Even assuming that government has at least P300 billion to buy out a single public utility, there is no certainty that utility prices will be lower after a takeover,” said Terry Ridon, Infrawatch PH convenor and former House energy committee member.
“In the power industry, the biggest chunk of consumers’ monthly bills do not come from distribution charges, but from generation fees, which are charged not by public utilities but by private generating companies. In other words, even the grandest of takeovers will not work to control utility prices,” Ridon said.
Ridon said these candidates, especially those running for Senate seats, wanted “to raise their populist profile.” He said Senate bets should study the power industry issues more.
“Had Senate bets studied the power industry better, they would know that the main intervention on electricity prices should be on the generation side, which had in fact achieved significant reforms through the competitive selection process. Another initiative includes further reducing the feed-in-tariff for renewables as prices in the sector had already dropped in recent years,” he said.
Ridon said another intervention should be to rationalize taxes imposed on electricity.
“Aside from VAT, consumers are also paying other taxes specific to the power sector. If Senate bets really wanted to have a solid platform to serve electricity consumers, it should first focus on reducing taxes on our electricity bills,” he said.
