Power Industry Reform to Aggravate the Sector’ s Bankruptcy

While many envisioned that EPIRA (RA 9136) will remove the National Government’s burden from the indebtedness of power sector through restructuring of the industry and privatization of NPC assets, here comes another loan of the Philippine Government that is dedicated to the power sector for the further deregulation and privatization of power generation in the country.

“The Bangko Sentral ng Pilipinas (BSP) has approved in principle the $450-million power sector program loan from the Asian Development Bank (ADB) that would bankroll the further deregulation and privatization of power generation in the country.”
-The Philippine Star 10/21/2006

This is not the first time that the government has loaned for the privatization of the Electric Power Industry. On December 2003, the government guaranteed a loan from ADB amounting to $40 Million for the Electricity Market and Transmission Development Project.

The total amount of loan granted specifically dedicated for the restructuring of the power industry is definitely much higher than what the industry has gained in the past 5 years effort of restructuring the power industry. The $450 million loan is even much higher than the proceeds from the sold NPC and Transco assets.

Considering that no consumers has yet to fell its positive effect, many are still asking, is it worth it to restructure the electric power industry?

Ref:
http://www.adb.org/Documents/Reports/phi-npc-psalm.pdf
http://philippineenergynews.blogspot.com/2006/10/450-m-loan-for-power-sector-okd.html