The International Monetary Fund reported last year that the Philippines has been one of Asia’s strong performers in recent years: “Sound policies and a favourable global economic environment have delivered robust growth, low inflation, and a sustainable debt path”.
The World Bank announced last year “economic growth is set to remain strong in the Philippines despite global uncertainty”. The Bank maintained its 6.7 per cent growth forecast for 2018 and 2019.
Given recent fiscal trends, Government consumption growth was revised upwards by the Bank, while private consumption growth is expected to expand at 5.9 per cent in 2018 and 6.2 per cent in 2019.
Investment growth was slightly upgraded as a result of higher public capital outlays, including increased infrastructure spending. Overall, it is anticipated that real GDP growth will increase towards the end of 2018 and into the first half of 2019.
The Philippines has a population of more than 100 million and there are 15 large dams in operation. The country’s dams have a total water storage volume of 8.67 x 109 m3.
The Philippines has a total installed capacity connected to its three grids of about 22 728 MW, comprising 3627 MW of hydropower. Renewables (hydro, wind, solar, geothermal and biomass) combined to generate 23 183 GW which was equivalent to 24.6 per cent of total generation. Hydropower generated 9605 GWh of this. IPPs produced 90 613 GWh or 96 per cent of total output in 2017, of which 6968 GWh was sold under contract to NPC. The rest was generated by NPC and off-grid generators.
Construction is underway at two large dams as part of the Wawa pumped-storage project in the province of Rizal. The upper reservoir in Mount Purro, with a storage capacity of 6.2 x 106 m3, will be impounded by an 84 m-high RCC dam, with four saddle dams. The lower reservoir will be impounded by a 47 m-high dam, with a storage volume of 9.7 x 106 m3.
Late last year, the Department of Energy reported that it is evaluating several large-scale power projects that could receive certification as being energy projects of national significance under Executive Order 30 that streamlines the procedures for major projects.
The projects being considered include the Wawa pumped-storage hydro project; the 500 MW Kibungan Badeo pumped storage hydro scheme; and the 100.8 MW solar farm by Total Power Inc.
Other projects that filed applications and under evaluation with the Department of Energy are the 10 MW Pulangi IV hydropower project in Pangasinan; hydro projects in Pampanga and Batangas; the 70-MW Camarines Sur wind power project; the 1.7 MW Tagpangi river hydro scheme and the 20 MW Sablan 1 hydro power project.
Transmission operator National Grid Corporation also applied for certification for several of its transmission projects.
Construction of the Kaliwa dam project, part of the flagship New Centennial Water Source Project, is scheduled to begin this year with financing from China, following approval by the National Economic and Development Authority. The estimated US$ 365 million project provides for the construction of a principal dam (Laiban dam), and a smaller downstream dam (Kaliwa dam) on the river Kaliwa, as well as a raw water conveyance structure. The estimated US$ 415.2 million project, which is to be developed as a public-private partnership, is intended to increase Metro Manila’s raw water supply to meet future potable water demand, and serve as a redundant water source, thereby reducing total dependency on the Angat dam reservoir, which currently supplies more than 90 per cent of the city’s water requirements.
Administrator Reynaldo Velasco of the Metropolitan Waterworks and Sewerage System recently reported that the Kaliwa dam is designed to withstand an 8.0 magnitude earthquake. “When completed, this project will answer the nagging water security problem in Metro Manila, Cavite, Rizal, Bulacan and Quezon,” he said during a press conference held during November last year at his office in Balara, Quezon City.
The development of this project and other large infrastructure schemes in the country are demonstration of how conducive the current environment is to investment. The strong opportunities for investment are further supported by the significant remaining gross theoretical hydropower potential of 47 459 GWh/year, and the technically feasible potential is 20 334 GWh/year. The economically feasible potential is 18 184 GWh/year. Only about 17 per cent of the technically feasible potential has been developed. Furthermore, about 275 MW of the existing hydro capacity is at units more than 40 years old.
The state-owned National Power Corporation is responsible for expanding electrification throughout the Philippine archipelago. It also manages the 17 large dams and 11 watersheds in the country and continues to oversee the privatization of the state’s remaining undisposed power assets.
In line with President Duterte’s AmBisyon Natin 2040 policy, the Government has set out its long-term energy objectives with the adoption of the Philippine Energy Plan for the years 2017 to 2040. The policy blueprint aims to ensure security of supply and increase access to energy through greater development of its indigenous resources. To reduce its heavy reliance on fossil fuel imports, the Government has set an ambitious target of increasing installed renewable energy capacity to at least 20 GW by 2040. To facilitate private sector investment, which will be key to meeting this and other renewable energy targets, the Government has undertaken measures to cut bureaucracy and expedite the implementation of energy projects of national significance. In June 2017, the President signed an executive order establishing the Energy Investment Coordinating Council to streamline the regulatory procedures affecting energy projects. High power prices, a relatively attractive feed-in tariff regime and a liberalized electricity market offer significant opportunities for renewable energy developers.