Malampaya funds eyed to lower rates

The government is considering the use of a portion of the P228-billion Malampaya fund to reduce power costs in the Philippines, an energy official said over the weekend.

“The DoE was informed that about P228 billion was deposited to the special account of the fund three months ago. This can be verified with the Department of Budget and Management, which is the steward of the account,” Energy Undersecretary Felix William Fuentebella said.

 

“Use the Malampaya to subsidize universal charges. There are bills filed in Congress to effect such subsidy,” Fuentebella said.

Another option was removal of the value added tax on power systems loss.

He said the department was also speeding up the permitting process and classifying energy projects and assets with national significance.

Fuentebella said the department was addressing price volatility in the market by implementing mitigating measures.

Other plans include the pursuit of segregation of losses, both technical and non-technical, with the end of lowering the cap.

“Pending bills for such segregation are filed in Congress,” he said.

Fuentebella said the implementation of competitive selection process in power supply contracts would help decrease power costs.

He said the department, in addition, would revisit the pricing methodology.

Read more here.

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