SPEECH | NATIONAL EXPORT CONGRESS (NEC) | COAL TAX
PHILIPPINE INTERNATIONAL CONVENTION CENTER (PICC)

SEN WIN: Magandang hapon po sa lahat. Me and my team created this wonderful speech, this wonderful power point about Philippine Innovation Act. Being the Chairman of Economic Affairs Committee, we pass on third reading the Philippine Innovation Act which primarily drives the innovation strategy of our country. Nasa third reading na ho ito, so ibig sabihin pasa na sa Senado. We are just waiting on our counterpart in Congress to pass the same legislation. This morning while watching TV, I saw two interviews regarding a very controversial provision of TRAIN. These two interviews actually discussed a very controversial provision which is the coal tax. Ewan ko kung naririnig nyo po ang coal tax, itong coal tax na na-insert last minute. Being exporters and manufacturers, I think it is imperative for you to know the impact of this provision to your businesses, and as your consumers, we also need to know exactly what will be the impact of this provision on our electricity bills, importante ho na malaman natin to.

Just for the record, I am not pro-coal, I am not pro-coal company. Wala kami sa power generation business, I am not connected to any power generation company whether it's renewable, it's coal, or fossil fuel, I am just a pro-consumer advocate. Mahal ko lang po ang consumers kaya pinag-aralan naming mabuti ito. Being the Chairman of Senate Energy Committee, I took it upon myself to really go deeper in this issue and study carefully what is the impact of this coal tax to all of us being a consumer myself.

There are realities in our power industry and I want to stress that the realities are: coal, is being passed on to the consumers so kung tumaas ho ang presyo ng coal, pinapasa ho iyan sa ating electricity bill, kung nag-adjust ho ang fluctuations in our currency, pinapasa rin ho iyan sa atin at makikita ho iyan sa mga power supply contracts. So if you look at the power coal contracts of all coal-fired power plants, this is a passed on cost to our consumers and also to industries and that is actually a regime around the world. That regime has been in operation for a very long time because if you want to attract investors to come into the power business, this regime is being applied all over the world. the Philippines, being a very important manufacturing base, also applied the same regulatory regime here in our country. So pinapasa ho iyan sa mga consumers at manufacturers. Right now, if you look at our energy mix, kalahati po ng kuryente na pumapasok ho sa ating bahay o pumapasok sa ating negosyo ay galing sa coal. Siguro nagtataka kayo bakit galing sa coal, bakit hindi galing sa renewable? May isang sagot lang ho dyan, dahil right now, coal is the cheapest form of source available in the world. I'm saying that right now because that will change in the next few years, maybe in the next 5 or 10 years, renewable will be cheaper, I think in the next maybe 12-15 years, renewable with battery will be cheaper so the landscape is changing and it is changing rapidly. If you look at other countries, I think in UK, they are now slowly facing out combustion engines and moving towards electric vehicles. With this change, cost is also dropping but right now, coal is the cheapest source of fuel supply. That's why coal dominates our energy mix in the country. Now, if you look at our electricity bill, we will see the different components of our electricity bill and as you notice, generation is always bigger. On an average is about 51% of our electricity bill, so kung nagbabayad ka ng electricity bill, for every hundred na binabayad mo, kalahati doon ay napupunta sa generation that's why generation actually has biggest impact whether to go up or to go down in our electricity bill. It's also worthy to note that 14% of our electricity bills, go to government imposition. So ibig sabihin, 15 pesos out of the 100 pesos na binabayaran natin sa electricity bill ay napupunta lang sa gobyerno in terms of taxes, feed and tariffs, and universal charge. But I think we have to stress the point that half of our electricity bill goes to the universal charge.

This is where the problem comes in, if you remember earlier I said 50% of our energy mix comes from coal pero hindi ganun sa buong Pilipinas, meron tayong ibang mga electric cooperatives at distribution utilities na 100% coal sila and 27 distribution utilities nationwide ay 100% coal ang nagsu-supply ng kanilang lugar, siguro nagtatanong kayo bakit? For a simple reason, that's the only available supply in their locality. That 27 utility is equal to 2.7 million household out of the 20 million household here in the Philippines so 10% of the households here in our country get their electricity from coal. To name a few, a lot of them come from Region 1, Region 3, NCR, and Region 4. It is also worthy to say that the top 3 locations of our MSMEs ay galing sa NCR, sa Calabarzon, at sa Central Luzon. Karamihan dito sa mga electric cooperatives nila ay 100% coal ang nagsu-supply. Let me name a few: one, Batangas Electric Cooperative, 100% coal yan; two, Camarines Sur Electric Cooperative, 100% coal; three, Ilocos Sur Electric Cooperative, 100% coal; fourth, Pampanga Electric Cooperative, 100% coal, fifth, Quezon Electric Cooperative, 100% coal, Tarlac, Zambales, Cebu, Panay is 100% coal so dito ho nagkakaroon ng problema because they will directly absorb the increase of the coal excise tax.

Magkano ba ang itataas ng kuryente natin? In the TRAIN proposal, right now we are paying P10 per ton on excise tax on coal, ang proposal ay tataasan yan to P300 per ton on coal. so ibig sabihin ay 3,000% increase and excise tax on coal. Kapag finactor in natin ang pinakamataas na, 300, tataas ng P15 per kilowatt hour (kWh) ang average household na nag kokonsumo ng 200 kilowatt, so ganun kataas po, halos P15 every month ang itataas ng kanilang electricity bill. Doon sa kumukonsumo ng 100% coal, tataas ng P31 every month ang kanilang electricity bill for an average Filipino family. If we quantify this, kung lalagyan natin ito ng illustration, P31 is 1 kilo of rice for an average Filipino family. So for an ordinary family, tinatanggalan mo na sila ng 1 kilong bigas kada buwan para bayaran niya ang kaniyang electricity bill.

We also ran some figures for micro businesses. in fact sa micro businesses, dito po sa Metro Manila na kumukonsumo ng 50% coal, kung meron kang eatery at ang electricity bill mo ay tataas ng P74 every month. Kung meron kang laundry shop, tataas po ng P500 every month dahil marami silang equipment na gumagamit ng kuryente at pag may computer shop ka naman, tataas ng P190 every month. Ang problema ay doon sa mga 100% coal, if you remember 2.7 million household consumes 100% coal. Kung may eatery ka, tataas ng P152 every month, kung may laundry shop business, tataas ng P1,063 ang bill mo, kung may computer shop, tataas ng P389 every month. I know all of us come from various different manufacturing businesses, we come from different categories in terms of businesses from micro, from small to medium. I think in terms of electricity cost, you are more knowledgeable person on how much your electricity bill will increase. Nevertheless, with this imposition of P300 per metric ton, tataas at tataas po ang electricity bill natin. It depends on which industry, obviously, if you use a lot of equipment, if you use a lot of machinery that demands electricity, you can see that your electricity bill will go up.

Unfortunately, right now in Southeast Asia, we call it the Asean 5 countries, we have the highest electricity cost for industry, commercial, and residential rates so ngayon pa lang, as we speak, mataas na ang ating kuryente. In the Asean 5, these are the more progressive countries in our region. I'm bringing this up to our entrepreneurs because I know how painful it is every month, as you pay for your electricity bills. In fact, before my stint as a public servant, I was once in your seat as an entrepreneur, working for our family business, managing our businesses, at natatandaan ko na tuwing dadating ang Meralco bill namin, ang nasa isip ko parang nagtatrabaho na lang ako sa Lopez family at hindi sa Gatchalian family dahil kalahati ng aming gastos, almost 40% of our direct cost goes to paying our electricity bills. I was telling myself, it's either I was paying for the Lopez family or the banks kasi may financing costs din tayo na binabayaran.

So ladies and gentlemen, I was enlightening everyone as to the impact of the coal tax, there is only one solution. Being the Chairman of the energy committee, we are pushing very hard to implement what we call the RCOA, the Retail Competition Open Access. In simple terms, pag na-implement ang RCOA, lahat tayo makakapamili ng bibilhing kuryente. Halimbawa, mahal ang coal, or mahal ang gas, mas mura ang renewable, pwede tayong makapamili kung ano ang bibilhin na kuryente. If I am an environmentalist or someone who promotes renewable energy, regardless of the price, I will now have the power of choice to buy electricity to buy renewable sources and that will come because it is in the EPIRA Law which is now being pushed by the Department of Energy. We are also pushing very hard in the Senate to implement RCOA feature in that bill. Marami pong excise tax na inilagay sa tax reform, andiyan na ho ang excise tax on sugar sweetened beverage, mga matatamis na drinks, ang mga mahilig sa softdrinks, sa mga juice, tataas na rin ho ang presyo non. Meron na rin tayong excise tax on fuel, kung mahilig ka sa mga sports car, sa mga mabibilis na sasakyan, pag malakas kumukunsumo ang sasakyan mo, definitely it will also increase your fuel cost. So what is the difference between excise tax on sugar sweetened beverage , excise tax on fuel, and excise tax on coal? The difference is in excise tax on sugar sweetened beverage and on fuel there is a choice and that is really the intention of putting excise tax on these two products. For sugar sweetened beverage, we want people to move out of sweetened beverage to healthier drink like drinking water and other non-caloric beverage. Ganun din sa fuel, kung ayaw mong kumukunsumo ng gas ay pwede kang maglakad, mag-commute, mag-bike. But with coal excise tax, there is no choice because once you get your electricity bill, hindi ka naman makakapili kung bibili ka dito o diyan, you will just pay for your electricity bill and that's why this excise tax on coal is a very controversial provision right now. It's good that the Secretary of the Trade and Industry is here right now because I really admire, commend the spirit of the Secretary in pushing the manufacturing sector. It's true, we can actually surpass 10% growth in the manufacturing sector but I'm afraid with this unclear imposition, we might see a slowdown in a manufacturing sector especially now that it is too dependent on electricity. If you want to boost our sector, our industry, we need competitive electricity prices. Once again, I will fight very hard to get this coal tax out of the equation solely because I want to see our exporters surpass yung binigay na target ni Secretary Mon Lopez of 150 billion banners every year. Thank you.