Trifecta

Sometimes, imagination is the missing ingredient.

This is true of the way we have traditionally pursued our water management initiatives. We tended to look at the dams we built as sources of fresh water and mechanisms to generate hydropower. But these facilities could also be used to help us manage flooding.

The upcoming Green Energy Auction 3 (GEA-3) conducted by the Department of Energy promises to unlock thousands of megawatts of clean energy by tapping into stable and reliable supplies of water. This involves integrating our dams with complementary impounding facilities to hold excess rainwater. The complementary facilities could in turn be used to add to our hydropower capacity.

GEA-3 will provide a roadmap to optimizing our water supplies while reducing our dependence on dirty energy sources. While adding to our potable water supplies and hydropower, the forthcoming infrastructure will make flooding more manageable.

Redesigning our energy strategy to work in combination with flood management requires time. It takes between five to 10 years to develop new water infrastructure. It is correct to extend the horizon for our energy planning. This is precisely what GEA-3 is all about.

Increasing the share of green energy requires not just building new water impounding facilities. It requires future-proofing our energy grid, adjusting power dispatch rules and improving the flexibility of existing hydropower units. Right now, we urgently need a comprehensive assessment of technical, environmental and regulatory factors to support the development of new hydropower facilities.

GEA-3 presents us with an opportunity to develop a multifunctional solution addressing challenges in energy supply, water availability and flood control. Henceforth, no energy project should be treated as a stand-alone initiative. We must see things as a trifecta of water supply, hydropower enhancement and flood control.

This is a watershed moment (pun intended) in our energy policy. Beginning with GEA-3, our energy planners must assess potential projects not just as fresh water and hydropower facilities. They must also be assessed in terms of contributions to flood control. Bidders for new projects ought to be able to fully optimize infrastructure to solve not only water retention and power generation problems. They must be able to utilize new infrastructure to help solve our serious flooding problems. This will make investments in them more sustainable.

The DOE targets production of 4,475 megawatts of renewable energy. The policy, as articulated by Energy Secretary Raphael Lotilla, is that his agency “is not only paving the way for a more sustainable future but also ensuring a transparent and competitive selection of renewable energy facilities” to meet our growing energy needs.

“By unlocking more capacity for renewable energy,” Lotilla adds, “GEA-3 provides a clear pathway to meet our energy demands in an environmentally sustainable way.” President Marcos himself sets the Energy Department’s agenda for utilizing water infrastructure not just for their traditional purposes but also for flood control.

Our energy officials have taken cognizance of the significant role of a major hydro facility in Rizal province in mitigating flooding in the Metro Manila area. This particular project provides a glimpse into how our hydro projects may, like a Swiss Army knife, become a means for addressing multiple problems simultaneously. Beyond irrigation and power generation, they could be equipped with tools for controlling floods and even driving community development.

Many years from now, the next generations will look back and be appalled by how environmentally unsound power generation was before we embarked on renewable energy technologies.

Short

We are not going to make it this year.

The ASEAN Plus 3 Macroeconomic Research Office (AMRO) reduced its 2024 growth forecast for the Philippines to 5.8 percent. This falls short of the expansion target of between 6 and 7 percent pursued by our economic managers.

For 2025, our economic managers are targeting an expansion rate of between 6.5 and 7.5 percent. AMRO forecasts a more conservative growth rate of 6.3 percent.

Economic Planning Secretary Arsenio Balisacan still hopes our full-year growth rate will hit 6 percent. To achieve that, our economy needs to grow by at least 6.5 percent in the fourth quarter.

Our growth slowed to just 5.2 percent in the third quarter of this year. Numerous factors contributed to that slight slowdown: an adverse global environment where our major trading partners managed lower growth; the damage wrought on our agriculture by extreme weather events; geopolitical uncertainty reflecting in higher fuel prices and a slight uptick in our inflation rate that could rein in moves to bring down interest rates.

Over the last month, the peso depreciated significantly against the dollar. This development could stoke inflation. Since our growth is driven mainly by consumption expenditure, the higher prices of goods could force lower consumer demand in the fourth quarter.

Filipino businessmen are still hoping interest rates could still be rolled back despite higher inflation prospects. Lower interest rates encourage investments and cause more confident consumer spending.

Many factors restrain us from jumping to a higher growth plane. Among these are: a failed agricultural sector that has been growing less than population growth for decades; slow movement in improving the ease of doing business in our economy; high levels of corruption that tell on the quality of infrastructure we build to support growth; comparatively lower levels of productivity that limits our competitiveness; a weak export sector and heavy reliance of food imports.