Power Generation

The National Power Crporation (www.npc.gov.ph) is the dominant power producer in the Philippines. Created in 1938, this government controlled corporation (GOCC) was mandated to provide electric power to areas not serviced by Meralco.

During Martial Law (1972), Pres. Marcos declared that NPC has the monopoly of the power generating industry. All power plants are to be owned and operated by NPC. However, a power crisis (i.e. shortage) during the early 1990s forced the government to look to the private sector. Using the emergency powers granted by Congress, Pres. Ramos relaxed the 60 Pinoy-40 Foreigner rule on Philippine investments stated in the constitution. Today, the private sector has an installed capacity of over 4,000 MW. This includes the biggest plants in the country today - the 1,500 MW gas plant in Ilijan, the 1,000 MW gas plant in Sta. Rita and the 1,200 MW coal plant in Sual.

The passage of the EPIRA Law in 2002 marks the end of the government monopoly in the power sector. Under the law, NPC must sell 70% of their generating capacity by the end of 2009. Presidential elections are scheduled for May 2010 and no selling of government assets will be allowed 6 moths before that.

However, an amendment in EPIRA was filed in Congress. This will allow NPC to retain 50% of their generating capacity. Authored by the president's son, this amendment is certain to be passed in the lower House.

A protest letter from a group of foreign businessmen, supported by members of an influential group of local businesmen, questions this amendment that comes so late in the game. Senators allied to the president gave the group leaders a dressing down during a hearing.

It remains to be seen whether the president will sign this amendment to let NPC control 50% of the generation market. The whole country is waiting.