The FPI warned that the suspension of the ODPS scheme adversely impacts big manufacturers especially those with a high power cost.
According to FPI president Jesus Arranza, "Philippine industries rely heavily on power. The cancellation of the ODPS, which is a source of great relief for industries in terms of lower power costs, render our member-industries less competitive."
As an organization that aims to reduce the cost of doing business and enable local industries to produce quality goods at lower prices, Arranza said that the ODPS scheme cancellation needs to be resolved urgently to mitigate its impact on FPI’s 36 industry associations and 70 manufacturers.
Arranza pointed out that "despite the rising costs of fuel and power, the prices of goods have remained largely unchanged. This is because many industries choose to lower their margins or absorb the losses rather than lose volume."
Arranza said that government’s decisive intervention in resolving the sudden ODPS scheme cancellation is "a small price to pay for the sacrifices being made by the industry in keeping prices low and inflation at bay."
One industry group, the Cement Manufacturers Association of the Philippines (CEMAP) had already expressed their grave concern over the suspension of the ODPS scheme from May 22 to 27 and June 4 to 10 this year.
CEMAP’s concern stemmed from the fact that their power costs account for approximately 30 percent of total production cost of cement and the ODPS cancellation contributes to a sharp rise in the cost of their operations.
The CEMAP complained that the sudden cancellation of the ODPS scheme did not give cement firms enough time to adjust their operations and to prepare to generate their own electricity, thus forcing their plants to draw power from the grid at rates that are 120 percent higher than their former cost.
CEMAP is appealing to the energy and power sectors to reduce the cement industry’s vulnerabilities and called for a shared effort to find solutions.
The acceptable solutions, CEMAP argued, should provide ODPS customers enough lead time and prior information regarding cancellations.
It should also provide ODPS customers with an alternative pricing mechanism to minimize the impact of such rise in purchased power cost.