Mindanao traders fear up to P300 M in losses this year

MANILA, Philippines - Businesses in Mindanao could lose as much as P300 million this summer on lower sales and higher power costs brought about by the power crisis in the area, the head of a local business chamber said.

Rey Billena, vice-president of the Gen. Santos Chamber of Commerce and Industry, said in a statement that the biggest losers are the Gen. Santos-based canning factories and the deep-sea fishing vessel operators.

He said the power failures are forcing companies to operate their own generators and even pay workers even when the factories do not operate because there is no electricity.

Billena said these factories need to use power generators so they can keep operating at a cost of P2 million a day in fuels and man-hours.

Billena said his own ice cream factory business incurred P500,000 a month in additional costs.

He said other businessmen in the Socsksargen region plan to close shop temporarily as power outages occur daily during working hours to prevent total bankruptcy. Socsksargen groups South Cotabato, Cotabato, Sultan Kudarat and Sarangani and Gen. Santos City.

The Department of Energy is looking at various options to address the power supply crunch in Mindanao, which is expected to continue until 2015 when new plants are built.

The 105-megawatt coal-fired power plant being put up by Conal Holdings Inc. in Maaasim, Sarangani is targeted for completion by 2015 as well as the 300-MW coal-fired power plant in Davao City being built by the Aboitiz Group.

Mindanao currently suffers from rotating power outages that last seven to 10 hours, depending on the area.

The Mindanao Business Council, which groups the 44 local business chambers and 11 major industry sectors, has supported a policy proposal of the Mindanao Development Authority to stop the Power Sector Assets and Liabilities Management Corp. from privatizing some Mindanao power plants.