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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
country’s 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 we’re 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” (today’s 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
Thank you!
23
Copy will be uploaded in EPDP’s website
http://www.upecon.org.ph/epdp/