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Electric power and political power in the Philippines

Nuclear Monitor Issue: 
#404
17/12/1993
Article

(December 17, 1993) At a lunch with Manila's business community shortly after his election, Philippine president Fidel Ramos joked that he would change people empowerment into electrical empowerment. A year later this morbid joke has become almost a reality. Under the National Power Corporation (NAPOCOR) energy program, power plants are being built at a speed never seen before while increasing electrical prices have caused national protests.

(404.4007) Michel Ligthart, WISE Amsterdam - At first sight NAPOCOR's latest energy program looks not very different from that under the Marcos regime. Following the 1973 global energy crisis, introduction of coal, hydro, and geothermal resources as well as conservation measures reduced Filipino oil imports in one decade from 90 percent of total use to 50 percent. Then Corazon Aquino gave top priority to debt repayment, and after the drop in oil prices in the late 1980s the government dissolved its Department of Energy and oil imports have gone back up to 60 percent of total use. Cheap gas turbines have been installed, but they are being used as baseload plants and power cuts (brownouts) are lasting for up to 6 hours. Also at Bataan, there's an abandonded but fully constructed nuclear plant built by Westinghouse that could possibly be revived.

Power Development 2000
Against this background NAPOCOR's Power Development Program 1991-2000 put a priority on ending the brownout periods by speeding up the construction of (mainly) coal-fired plants. If this fast-track program is successful, Fidel Ramos can be sure of a boost in popularity - popularity which he will need as electricity prices rise even higher. Other long-term goals of the energy program are: privatization of NAPOCOR, a free electricity market, and the lowering of oil imports by increased end-use efficiency and exploitation of indigenous energy sources - all by the end of the century.

Power Development 1991-2000 is a cleverly written program promising people as well as businesses a better future. In line with international trends towards sustainability and privatization and with a bit of lip service to the Philippine social movement, the program promises an independent energy future. But the program promises too much without choosing anything. It's like a child's wish-list written to Santa Claus, fail-ing to choose anything because it wants to include everything.

The wish to end the brownouts is so strong in the Philippines that it enabled Ramos to get special emergency powers, allowing him to enter into contracts for power plants without public bidding, to short-cut social and environmental requirements, and to raise energy prices to meet World Bank conditions for further loans. The energy crisis in the Philippines has the government looking for quick fixes and ignoring the roots of the crisis. The Masinloc energy project is a recent example of the government's "fast-track" program.

Masinloc Coal Plant
On the beautiful Oyon Bay in Zambales lies the quiet town of Masinloc. However, this post-card picture will disappear when the government pushes through the construction of a 600-megawatt coal-fired power plant. The plant was funded by a US$ 200 million loan from the Asian Development Bank (ADB) in 1989, based on information from NAPOCOR that Masinloc Bay had no particular ecological value (no Environmental Impact Statement was done) and that people were willing to sell their land for the plant.

The reality was quite different. From the moment the plans were announced, the Masinloc community protested. A 200-hectare mango plantation with trees more than a century old and more than 1000 surrounding trees will be cut. The Masinloc River will be used for cooling water, leaving the community with water shortages for their rice fields and households. The plant's effluent will cause a 1 percent rise in the temperature of the bay, ending its function as a breeding ground for rare fish. Protected blue coral will be dynamited to create a channel for ships delivering coal. Milk-fish and other fish harvests in the bay will no longer be possible.

Experience with a similar type of plant, Calaca I in Batangas, has taught that the risks of ground-, water-, and air-pollution (with fly ash and sulfur) are unacceptably high in the Philippines. The number of farmers, fisherpeople, mango growers, and laborers left without income after being displaced by the plant is estimated at 15,000.

 

  Capacity in Use % of total Potential Capacity * Total Capacity
Hydro 2.213 25% 6.654 8.867
Geothermal * 857 36% 1.548 2.405
Coal - - 1.820 1.820
Natural Gas - - 4.000 4.000
Total 3.070 18% 14.022 17.092
* minimum possible potential capacity

 

Source: Napocor, 1990 Power Development Plan

Under public pressure, the Philippines Department of Environment and Natural Resources (DENR) has issued a hasty Environmental Compliance Certification (ECC) on Masinloc, and since 1991 a paramilitary unit has been stationed there to restrain the protest. Since then, reports of intimidation and corruption have increased. Teachers got sudden salary increases and invitations to visit the coal-fired plant on Java at NAPO-COR's cost. The community has been promised new jobs, relocation compensation, and land prices of P 150 per square meter (even though current prices have fallen to P 41 per square meter).

All these machinations and publicity and local and national protest have delayed the project for over three years. Right now it is awaiting co-financing arrangements worth US$ 150 million from the Export-Import Bank (EXIM) of Japan, as required by the ADB loan. Clearly it is the intention of ADB and EXIM to push the Philippines into the world economy. But doubts at EXIM-Japan have increased since NAPOCOR's public confession that Masinloc is not vital in solving the country's energy crisis. It is now clear that ADB and EXIM-Japan are considering 31 December, 1993 as the deadline for compliance with all the environmental and social requirements for the plant.

A question that remains in the back-ground is: for whom are the power plants being built? The fast-track coal-fired projects like Masinloc are projected to decrease oil imports from 47 percent of use to a highly unrealistic 9 percent, while coal imports from such countries as Indonesia and Australia will rise from 3 percent to 49 percent. The growth in electrical supply will primarily benefit industries that produce for export while leaving large numbers of the population in darkness.

The Philippine environmental movement rightly points out that behind the facade of faddish words, NAPOCOR's program hides the old, well-known export-oriented industrialization model. The calculated 11.25 annual rise in energy supply is instrumental for another Ramos plan, called Philippines 2000. This plan would propel the Philippines to the status of a Newly Industrialized Country with an annual economic growth of 8 percent. This would be achieved by attracting foreign industries lured to the Philippines with tax exemptions, low labor cost, artificially low energy prices, and lax implementation of environmental laws.

New Dependence or Alternatives?
NAPOCOR's program is going to bring the Philippines further down the road to foreign dependence, and projects for national development are increasingly subordinated to foreign capital under conditions set by the World Bank and the International Monetary Fund. Sacrificing local energy sources to a growth-oriented national system is the same as sacrificing today's security to the uncertainty of tomorrow. Forty percent of the debt for these large capital projects will have to be paid in foreign currency. The countries of the South will never be able to finance these investments due to the increased cost of imported fuel. The Multilateral Development Banks can only finance a quarter of the needed capital, so the World Bank is once again creating the conditions for bankruptcy.

In contrast, the Philippine environmental movement points out that maintenance of existing plants and energy conservation are feasible alternatives to these large capital projects. At present only 18 percent of indigenous energy potential is being used - less than 25 percent of available hydropower, 36 percent of usable geothermal energy, and less than 1 percent of domestic coal and gas.

Time for Action
Against this background, community organizations in Masinloc, supported by the national NGOs of COSEF (Coalition for a Safe Energy Future) and international support groups are calling on the Asian Development Bank and the Export-Import Bank of Japan to stop the proposed loan for the Masinloc project. You can help by sending faxes to the ADB and Japan Eximbank offices protesting the proposed loans. Send faxes to ADB (+63 2 741 79 61); Eximbank Japan (+81 33 287 9574); and Eximbank Manila Office (+63 2 817 32 02).

Sources:

  • CEC, Environmental Action Alert, Vol. 1, no. 3 (1992)
  • Haribon, Environscope, Vol VII, no. 6 (Apr/Jun, 1991)
  • LRC-KSK, Bankwatch & Background Report (NGO campaign during ADB Board of Governors' meeting, 1993)
  • PEAN press statement, May 4, 1993