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  • Powering the future: Promoting energy for inclusive growth

    ARSENIO M. BALISACAN, PhD Secretary of Economic Planning

    National Economic and Development Authority

    EPDP Conference 2016 13 January 2016 | New World Makati Hotel

  • Takeaway

    The Philippines has become one of the fastest-growing economies in Asia

    But it is important to sustain rapid growth and make it inclusive

    Infrastructure development is key to achieving inclusive growth

    The issue of providing energy access to all can be broken down into: availability, quality, affordability, compliance to SDG

    The goal of being a high-income country by 2040 can be met with the proper infrastructure support, especially for energy

    2

  • Philippine growth from 2010 to 2014 is among the highest in Asia no longer the sick man of Asia.

    Source: WB 3

    0

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    1970 -1979 1980 - 1989 1990 - 1999 2000 - 2009 2010 - 2014

    GD

    P g

    row

    th (

    ann

    ual

    %)

    Average growth of GDP per decade

    Indonesia

    Malaysia

    Philippines

    Singapore

    Thailand

    Vietnam

  • 2015

    2016

    -

    1.00

    2.00

    3.00

    4.00

    5.00

    6.00

    7.00

    8.00

    9.00

    GDP in 2000 billion Php, 1960-2016

    The Philippine economy is on a higher growth

    trajectory since the beginning of the current decade.

    Real GDP growth

    6.2% (2010-2014)

    6.1% (2014)

    7.2% (2013)

    6.8% (2012)

    Source: PSA

    Structural break of potential real GDP at around 2009

    4

  • Growth-enhanced fiscal space has allowed major investments in

    infrastructure, with spending more than tripling...

    National Economic and Development Authority

    215.7 306.9 346.2

    595.8 766.5

    2

    2.7 2.7

    4.3

    5.0

    0.0

    1.0

    2.0

    3.0

    4.0

    5.0

    6.0

    0.0

    100.0

    200.0

    300.0

    400.0

    500.0

    600.0

    700.0

    800.0

    900.0

    2012 2013 2014 2015 2016

    % o

    f G

    DP

    in B

    illi

    on

    Pe

    sos

    Actual (2012-2014)/Program(2015)/Proposed(2016)

    Ratio to GDP (rhs)

    Public infrastructure spending, Billion Php and % of GDP

    Source: Department of Budget and Management Note: 2012 to 2014 - Based on actual GDP and infra spending 2015 Based on 2016 BESF Program spending 2016 Based on 2016 BESF Proposed spending

  • Lost decade in 2000s owing primarily to low income growth and to the high inequality of access to employment & social development opportunities.

    Source: WB

    0

    10

    20

    30

    40

    50

    60

    70

    80

    90

    Poverty headcount ratio at $1.25/day, PPP (% pop.)

    EAP (developing only) Indonesia Philippines

    Thailand Viet Nam China

    6

    However, weak performance in

    poverty reduction relative to the

    countrys neighbors

  • Continue addressing key infrastructure constraints

    Maintain high levels of public investments in human

    capital, particularly in health, education, and social

    protection

    Invest in disaster resiliency

    Deepen policy and institutional reforms toward

    substantially improving the business climate

    7

    Lesson: we need to sustain rapid

    growth

  • Infrastructure: There have been improvements in the overall quality of

    infrastructure, but were still lagging far behind ASEAN counterparts.

    Infrastructure ranking (2011-2015)

    Source: WEF Global Competitiveness Report 2011-2015

    8

    2011 (142

    economies)

    2012 (144

    economies)

    2013 (148

    economies)

    2014 (144

    economies)

    2015 (148

    economies)

    Malaysia 26 32 29 25 24

    Philippines 105 98 96 91 90

    Thailand 42 46 47 48 44

    Indonesia 76 78 61 56 62

  • Access to energy for all as a

    strategy for inclusive growth

    Availability

    Quality

    Affordability

    SDG-compliance

  • Availability: Household Electrification Status

    Accomplishments Target

    2011 2012 2013 2014 2015 2017

    Household (HH) Electrification Level (%)

    74 77 79 81 88 90

    HH with electricity (000)

    15,184 16, 114 16, 943 17, 658 18, 896

  • Survey Question: How would you assess the quality of the electricity supply in your country (lack of interruptions and lack of voltage fluctuations)?

    1 = insufficient and suffers frequent interruptions; 7 = sufficient and reliable

    Source: EPDP, World Economic Forum, Global Competitiveness Report, various years.

    Rank Score Rank Score Rank Score Rank Score

    PHILIPPINES 82 4.2 101 3.4 98 3.7 87 4.2

    Cambodia 117 2.5 112 3.1 105 3.6 110 3.0

    Indonesia 92 3.9 97 3.6 93 3.9 84 4.3

    Malaysia 31 5.8 40 5.7 35 5.9 39 5.7

    Thailand 43 5.5 42 5.7 44 5.5 58 5.1

    Vietnam 104 3.2 98 3.6 112 3.1 88 4.2

    Total surveyed

    Country

    144

    2007-2008 2009-2010 2011-2012 2013-2014

    134 139 144

    Quality

  • Affordability

    Residential Industrial

    Source of basic price data: Philippines MERALCO; Indonesia- PLN; Thailand-EGAT, MEA; Malaysia- MEIH Stat; Singapore- SingStat, EMA and CPI- WorldBank

    0

    0.05

    0.1

    0.15

    0.2

    0.25

    19

    91

    19

    92

    19

    93

    19

    94

    19

    95

    19

    96

    19

    97

    19

    98

    19

    99

    20

    00

    20

    01

    20

    02

    20

    03

    20

    04

    20

    05

    20

    06

    20

    07

    20

    08

    20

    09

    20

    10

    20

    11

    20

    12

    in US$/kWh

    0

    0.05

    0.1

    0.15

    0.2

    0.25

    0.3

    0.35

    0.4

    0.45

    19

    91

    19

    92

    19

    93

    19

    94

    19

    95

    19

    96

    19

    97

    19

    98

    19

    99

    20

    00

    20

    01

    20

    02

    20

    03

    20

    04

    20

    05

    20

    06

    20

    07

    20

    08

    20

    09

    20

    10

    20

    11

    20

    12

    in US$/kWh

  • 0

    5

    10

    15

    20

    25

    30 Residential Commercial IndustryUS/kWh

    Source: ACE as Compiled by IEEJ (2013); from Del Mundo (ppt during 2016 EPDP conference)

    Philippines electricity price is almost twice of the average price of the Region

    ASEAN Power Rates (2011)

  • 0

    1

    2

    3

    4

    5

    6

    7

    8

    19

    71

    19

    73

    19

    75

    19

    77

    19

    79

    19

    81

    19

    83

    19

    85

    19

    87

    19

    89

    19

    91

    19

    93

    19

    95

    19

    97

    19

    99

    20

    01

    20

    03

    20

    05

    20

    07

    20

    09

    20

    11

    20

    13

    toe/hab

    Total Energy Consumption Per Capita

    Indonesia Malaysia Philippines Singapore

    Thailand Japan China South Korea

    0

    2000

    4000

    6000

    8000

    10000

    12000

    19

    71

    19

    73

    19

    75

    19

    77

    19

    79

    19

    81

    19

    83

    19

    85

    19

    87

    19

    89

    19

    91

    19

    93

    19

    95

    19

    97

    19

    99

    20

    01

    20

    03

    20

    05

    20

    07

    20

    09

    20

    11

    20

    13

    kWh/cap

    Electricity Consumption Per Capita

    Indonesia Malaysia Philippines Singapore

    Thailand Japan China South Korea

    Source: EPDP, Enerdata

    Power consumption has been increasing, but still

    below consumption of our neighbors.

  • The poor pay a high price to meet their

    needs for energy

    Average Poorest quintile

    Quintile 2 Quintile 3 Quintile 4 Richest quintile

    Share of electricity, gas, fuels in the budget

    7.0 7.2 6.9 7.2 7.4 6.7

    Source: FIES 2012

  • Impact of electrification on

    household welfare

    Source: Chakravorty, Emerick, and Ravago EPDP paper Lighting up the last mile: The costs and benefits of extending electricity to the rural poor (todays presentation).

  • Ensure universal access to affordable,

    reliable and modern energy sources

    Increase substantially the share of

    renewable energy in the global energy mix

    Double the global rate of

    improvement in energy efficiency

    Enhance international cooperation to facilitate

    clean energy research and technology

    Expand infrastructure and upgrade technology for supplying modern

    and sustainable energy services for all in developing countries

    SDG-compliant

  • 0

    5

    10

    15

    20

    25

    30

    35

    40

    45

    50

    19

    71

    19

    73

    19

    75

    19

    77

    19

    79

    19

    81

    19

    83

    19

    85

    19

    87

    19

    89

    19

    91

    19

    93

    19

    95

    19

    97

    19

    99

    20

    01

    20

    03

    20

    05

    20

    07

    20

    09

    20

    11

    20

    13

    % Share of Renewables in Electricity

    Capacities

    Indonesia Malaysia Philippines Singapore

    Thailand Japan China South Korea

    0.95 1.81

    4.04

    6.5 7.46

    9.08 9.69

    11.61

    0

    2

    4

    6

    8

    10

    12

    14

    tCO2/cap C02 per inhabitant, 2014

    The Philippines share of renewable energy has been the highest in the

    region since 1991. In 2014, RE share stands at 33%. At the same time, the

    country has low CO2 emissions.

    0.24 0.26

    0.47 0.58

    0.96 1.02 1.17

    1.7

    0

    0.2

    0.4

    0.6

    0.8

    1

    1.2

    1.4

    1.6

    1.8

    kCO2/US$05 C02 intensity to GDP, 2014

    Source: EPDP, Enerdata

  • 0%

    20%

    40%

    60%

    80%

    100%

    Luzon Visayas Mindanao

    Installed Capacity by Grid, by Source, 2015

    Oil

    Coal

    Renewables

    Natural Gas

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Luzon Visayas Mindanao

    Expected Capacity Mix, 2019

    Oil

    Coal

    Renewables

    Natural Gas

    Natural Gas, 2,862 , 15%

    Renewables, 6,138 , 33%

    Coal, 5,844 , 32%

    Oil, 3,608 , 20%

    Installed Capacity, by Source, 2015

    Natural Gas, 4,012 , 17%

    Renewables, 6,783 , 29%

    Coal, 9,261 , 39%

    Oil, 3,639 , 15%

    Expected Capacity Mix, by Source, 2019

    Source: EPDP, DOE

  • The goal is to attain high income status by 2040

    30,000.00

    25,000.00

    20,000.00

    15,000.00

    10,000.00

    5,000.00

    - 1980 1987 1994 2001 2008 2015 2022 2029 2036 2043 2050 2057 2064 2071 2078

    PH past (1980-2009) PH future (Daang Matuwid)

    PH future (Daang Tiwali) PH present (2010-2014)

    GD

    P p

    er

    cap

    ita

    (in

    cu

    rre

    nt

    USD

    )

    2057

    South Korea (2014)

    PH future (Strong growth)

    2043 Rich-country threshold

    PH future (Weak PH present (2010- growth)

    2014)

  • Source: Ravago, Fabella, Alonzo, Danao, and Mapa Filipino 2040 Energy: Power Security and Competitiveness (EPDP presentation)

    With good governance and good economics, we are confident that we can achieve sustainable and inclusive growth in 2016 and beyond

    30,000.00

    25,000.00

    20,000.00

    15,000.00

    10,000.00

    5,000.00

    - 1980 1987 1994 2001 2008 2015 2022 2029 2036 2043 2050 2057 2064 2071 2078

    GD

    P p

    er

    cap

    ita

    (in

    cu

    rre

    nt

    USD

    )

    2057

    South Korea (2014)

    PH future (Strong growth)

    2043 Rich-country threshold

    PH future (Weak PH present (2010- growth)

    2014)

  • From Elsevier: http://store.elsevier.com/Sustainable-Economic-Development/isbn-9780128004166/ From Amazon: http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472 Online version: http://www.sciencedirect.com/science/book/9780128003473

    http://store.elsevier.com/Sustainable-Economic-Development/isbn-9780128004166/http://store.elsevier.com/Sustainable-Economic-Development/isbn-9780128004166/http://store.elsevier.com/Sustainable-Economic-Development/isbn-9780128004166/http://store.elsevier.com/Sustainable-Economic-Development/isbn-9780128004166/http://store.elsevier.com/Sustainable-Economic-Development/isbn-9780128004166/http://store.elsevier.com/Sustainable-Economic-Development/isbn-9780128004166/http://store.elsevier.com/Sustainable-Economic-Development/isbn-9780128004166/http://store.elsevier.com/Sustainable-Economic-Development/isbn-9780128004166/http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.amazon.com/Sustainable-Economic-Development-Environment-Institutions/dp/0128003472http://www.sciencedirect.com/science/book/9780128003473http://www.sciencedirect.com/science/book/9780128003473

  • Thank you!

    23

    Copy will be uploaded in EPDPs website

    http://www.upecon.org.ph/epdp/

    http://www.upecon.org.ph/epdp/http://www.upecon.org.ph/epdp/http://www.upecon.org.ph/epdp/

  • Powering the future: Promoting energy for inclusive growth

    ARSENIO M. BALISACAN, Ph.D. Secretary of Economic Planning

    National Economic and Development Authority

    EPDP Conference 2016 13 January 2016 | New World Makati Hotel

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