by: Jessica Divina Fulgencio

New hopes are set for the Philippine Economy with the restructuring of the power industry after Congress approved last February 18 the implementing rules and regulations (IRR) of Republic Act 9136 or the Power Industry Reform Act of 2001.

The Act will restart the government’s privatization program, paving the way for the sale of 70 percent of the state-owned energy company Napocor worth $5.2 – 6 billion. The money is badly needed to pay Napocor’s debt amounting to $6 billion.

Napocor’s sale is considered a formality although the final approval is still on process.

In June 2001, protest groups lobbied at the Senate to call for the disapproval of the Act. However, with the Power Commission’s approval of the IRR, there’s no stopping to the Napocor’s privatization.

“We feel this is a matter of credibility, both domestically and to our international investors, that we show our political will in this path of power restructuring,” Energy Secretary Vincent Perez said.

The collapse of US energy giant Enron have caused fears of hampering the privatization program, but Perez said it may broaden the bidding.

“There are Japanese, Asian and European firms that have expressed a significant interest because our electricity growth rate is relatively high.”

Due to the relatively high energy growth rate in the country, the IRR has also provided for a socialized pricing mechanism called the lifeline rate for marginalized end-users.

Sen. Renato Cayetano, chairman of the Senate Committee on energy and co-chairman of the Joint Congressional Powercom, said “it is now mandated by law that families living in poor and marginalized areas will be charged by distribution utilities with rates that are lower than what is normal.”

Cayetano added that the IRR will concretize the responsibilities of implementing bodies such as the Department of Energy.

The IRR was formally signed last February 20.

With reports from Philippine Star, February 25, 2002.