WHILE the rest of our Asean neighbors have their governments subsiding power rates in their respective countries, ours does not, which has resulted in the Philippines having the highest electricity rates. Not only our electricity rates not subsidized by the government, Philippine industries are further burdened with even higher electricity costs to subsidize marginalized users. In a study conducted by International Energy Consultants, out of 44 distributors in Asia, it placed Meralco as the ninth most expensive. In comparison, Malaysia is at 37th; Thailand at 38th; and Indonesia in 43rd place. From all indications of how we are managing our power situation, it looks like our electricity rates will more likely increase than decrease.
The Philippines also has the highest minimum wage in Asean, with Singapore and Brunei Darussalam having no minimum-wage requirements. Our more progressive neighbors, such as Malaysia are at MYR 900 ($ 250) per month and Thailand at THB 300 ($8.94) per day. In comparison our minimum wage is at P481 ($10.77) per day with a mandatory 13th month pay. Looking at the trajectory of minimum-wage movements, as well as national policy across Asean it would seem that the gap will actually widen in the coming years.
This onerous situation has resulted in a weak Philippine industrial sector which has largely been unable to compete globally due to the high cost of power and wages. Thus, creating a vicious cycle of high unemployment caused by local industries unable to compete due to the unsustainable policy of a constantly increasing high minimum wage and a highly taxed and uncompetitive electricity rate.
To alleviate the suffering of the people living in poverty due to their lack of employment opportunities, the government’s answer is the Pantawid Pamilyang Pilipino Program. This is essentially a subsidy from the government which has been budgeted at about P70 billion a year. While it may provide immediate relief to those in need, it offers no long-term solution to make our manufacturing industries competitive to solve our festering unemployment problem. Could this subsidy have been put to better use?
If the government is going to give a subsidy anyway, would it not have been better if it did what the other Asean countries did and subsidized the electric power rate instead? Think about it, everyone uses electricity, from the lowest level worker to the largest corporation. In short, having a lower power cost would benefit everyone without exception. With lower power costs, it would help make our industries more competitive and be able to provide for more jobs for Filipinos. With a lower power rate, the cost of living would also be cheaper lessening the pressure to keep on increasing our minimum wage. Of course, without having to contend with an ever escalating minimum wage, more industries will be able to be competitive and keep on providing for more jobs for Filipinos.
Instead of having to contend with this vicious cycle of increasing power costs and spiraling minimum wages, we can break this nightmare and provide for a better quality of life for more Filipinos by giving them jobs here and instead of a hand out. Once they have jobs here, then there is no need for them to go overseas to look for a job, risking their family and themselves. Let us take advantage of the tax free movement of goods in Asean by being an export powerhouse with competitive industries that provide jobs for all Filipinos. This is a much better alternative to just being a consumer market for other Asean countries that have been able to establish a competitive manufacturing sector.
Don’t you think it is about time that we give a better future for Filipinos by helping Philippine industries become more competitive to provide more jobs instead of a hand out? If that is the case, then it is about time we change our strategy. (Comments may be sent to georgechuaph@yahoo.com)