Delivered by Sec. Alfonso G. Cusi

EU-Philippines Business Summit 2016

Shangri-La Hotel Makati

October 4, 2016

Theme:  EU-Philippines Economic Ties: A New Chapter Unfolds

To the EU-Philippine Business Network (EPBN) and its members from the various European Chambers of Commerce based in the Philippines, Senator Sherwin Gatchalian, panelists, European business leaders and stalwarts, esteemed guests, friends, ladies and gentlemen, good morning.

It is a privilege to be invited here and be with our energetic business partners from the EU who are looking for investment opportunities in the world. We are grateful as a people for the gift of innovation, infusion of capital and infrastructure development that you have shared with us through the years and which helped build our nation into what it is today.

And what an exciting chapter is opened this year indeed! Among other things, a new Administration is in place and is making headway in its first 100 days. With its beginning emphasis on curbing drugs, criminality and corruption, the Administration is making good its promise to improve the peace and order situation in the country, which of course is necessary to a healthy and conducive business and investment climate.

The Philippine energy sector is one area rife with investment opportunities, it being capital-intensive and primarily private sector-led. Our priorities in the sector remain centered on energy security‎, with stark focus on increasing supply, improving reliability and resiliency of our energy infrastructure.

We are aiming for total electrification of every household throughout our three major islands by 2020. We are also targetting a "One-grid Philippines", with the Mindanao grid finally interlocking with the Visayas and Luzon grids, not later than 2022. 

‎In our pursuit of energy security, we build on and improve on the well-considered and highly evolved Power Development Plan, which comprises sectoral strategies on transmission, distribution, missionary and household electrification.  

We will continue to explore and use local or indigenous sources, like renewables, fossil fuels and alternative fuels, focusing primarily on the development of our geothermal energy.  Guided by our international and environmental obligations, we are geared to promote and adopt innovative, green, efficient technologies without compromising DOE’s mandate to provide reliable, quality, secured and affordable supply of electricity.

In his first State of the Nation Address, President Rodrigo Duterte has firmly declared that with our vigorous pursuit of industrialization and economic development, we will be expecting an increase in the demand of power supply.  As such,     we are now in the process of reviewing our fuel and capacity mix policy to really ensure the right level of diversification and balance in our existing energy resources, to avoid overdependence on any one fuel source.

‎To ignite interest and pave the way for investments, we will identify the portfolio of installed and dependable power capacities, specifically for baseload, mid-merit and peaking requirements. ‎We have held and lined up various energy investment fora and regional energy investment briefings to inform, update and stoke interest in the business and investment community.

Deserving of special mention, our nascent natural gas industry urgently requires substantial investment in infrastructure development. Our plan is to build a common liquefied natural gas (LNG) receiving and distribution infrastructure as part of the future "clean energy city". ‎Worthy of note also is the plan for total privatization of PSALM's remaining power generation assets within the next 3 years.

‎The DOE will mirror the Administration's priorities of fostering a safer and healthier business‎ climate for investors. Thus,   with the same tenacity, we will implement measures to improve the conditions and ease of doing business in the energy sector.

We will streamline and simplify our permitting processes. Not only have we remodeled our office workflow and procedure, but have also developed, for pilot-testing in renewable energy projects, a web-based system--the Energy Virtual One-Shared System (EVOSS)--to enable prospectors to monitor the status of their applications. 

Pursuant to the DOE’s commitment to maintain and strengthen the predictability, certainty and consistency of investment rules of the country, the DOE has strongly affirmed its position in its Motion for Reconsideration pending before the Commission of Audit that the income tax of the Malampaya contractor shall form part of the 60% of government share.

One of our major strategies to manage the surge in demand for energy is the promotion of Energy Efficiency and Conservation (EEC) in all sectors.  We thank the EU for helping us draw the Roadmap and Action Plan for Energy Efficiency and Conservation. To attain permanence and general application of these EEC measures, we will advocate the enactment of an EEC law in Congress‎. Senator Win Gatchalian is here, and being the one in charge of energy-related initiatives in the Senate, he can perhaps give us a lowdown on the particular developments in the sector.

At any rate, for as long as I am here as its chief steward, the DOE will be a proactive advocate and partner of Congress in the timely passage of legislation, especially those that parallel the Administration's priorities and those sought for by the energy sector and, more importantly, our consumers.

We also plan to lay down important energy policies that bear an impact on business and investment:

1. First, we desire a policy of declaring energy projects as projects of national significance--which they really are anyway. Hence, they should enjoy expeditious and preferential treatment in the permitting process, should be protected from court injunctions, and be entitled to incentives, such as exemption from real property taxes and other local taxes.
2. DOE will also draw up and streamline the preferred areas for locating energy infrastructure, which can‎ lessen, if not eradicate, right-of-way (ROW) issues and improve competitiveness of local governments.
3. We are also studying a National Policy on Clean Civilian Nuclear Energy in order to determine its rightful place in the energy mix, and to resolve with finality the Bataan Nuclear Power Plant (BNPP) impasse. ‎

In fact, just last month, we successfully hosted here an Asia-Pacific clean civilian nuclear energy conference. It may have caused some frowns and drawn criticism from the ECCP. However, but please kindly understand though that these efforts of ours are neatly aligned with the current regional policy developments and commitments in the ASEAN.

Finally, and most important of all, the DOE commits to strengthen and forge further international ties‎, with other States and international organizations, cognizant that comity and reciprocity are what really set the stage and the tone for a healthy inflow of investments to the country.

In the process, we not only contribute to our economic development, but also enhance our reputation in the international community and help achieve the ideals of the United Nations, one of which is Sustainable Energy for All.

Anyway, being in the energy sector, I should be the first to ensure fullness of energy here, and not lack or unnecessary dissipation of it. So I will relent and not prolong this any longer. We assure the ECCP and the EU business community that investment prospects in the Philippine energy sector are full of promise and potential‎ energy.

Again, thank you to the European Chamber of Commerce in the Philippines (ECCP) and the European business community for continuing to bet on the Philippines, which definitely improve the condition of our citizenry and communities.

Maraming salamat po at mabuhay kayong lahat!

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