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Salceda calls for contingencies on energy supply, manufacturing as Taal eruption seen possible

July 5th, 2021

Salceda calls for contingencies on energy supply, manufacturing as Taal eruption seen possible; House tax chief revives call for “reimagined” development of area around Taal, using economic township established to avoid Mayon hazards as model

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) called on the National Government to make preparations on energy supply, industrial continuity, emergency response, and economic relief in response to a possible eruption of the Taal Volcano. The House tax chief warned that the manufacturing and energy sectors could suffer from heightened

“The most probable national challenge that could arise out of the Taal eruption is damage to the energy and manufacturing sectors. These industries are highly concentrated around the area. We have to have contingencies,” Salceda said.

According to the latest bulletin by the Philippine Institute of Volcanology and Seismology, “in the past 24-hour period, the Taal Volcano Network recorded 17 volcanic earthquakes, including one volcanic tremor event having a duration of 45 minutes, 16 low frequency volcanic earthquakes, and low-level background tremor that has persisted since 08 April 2021.”

“The energy sector is particularly at risk. All of our natural gas power plants and several geothermal, coal, and biomass power plants are in Batangas. Power rates are already at elevated levels, year-on-year. The reserves are very thin. So, we have to prepare, and see which power generators can be tapped from outside the area to fill in the grid’s demand in case the worst possibility takes place and Taal actually erupts violently,” Salceda said.

BOI, DOE should use CREATE to diversify power sources

“All in all, there are 20 power plants in Batangas. They account for 5,255.9 MW of installed capacity, or 30.9% of the Luzon Grid. This very high concentration of power sources in an area prone to the same set of hazards is something we need to address with power supply diversification,” Salceda said.

“The tool most immediately available to us and the next administration is CREATE. Subject to industry classification in the Strategic Investment Priorities Plan, power plants could qualify for income tax holidays of 4-7 years, plus enhanced deductions of 5 years, plus 2 years if in areas recovering from armed conflict or a major disaster, plus 3 years ITH if relocating from NCR to all other areas. That is up to 17 years of incentives,” Salceda explained.

“So, I urge the DOE and the Board of Investments to come up with strategies to encourage power generation companies to diversify their production bases and use CREATE to make such diversification financially viable,” Salceda added.

Renewed call to “reimagine” Taal-area development

Salceda also said that there is a need to revive his proposal of “reimagined” development for the Taal-area.

“We really need to go for more adaptive development in the area. In January 2020, when Taal also saw increased activity, I proposed a comprehensive framework for enhanced reconstruction of the Taal area, or the South of Manila Growth Corridor (SMGC),” Salceda said.

“The next administration will probably be better equipped to make this plan happen. The idea is to encourage development outside the danger zone, by putting up the necessary infrastructure support, economic incentives, and policy direction for more resilient development,” Salceda added.

“We used the model in Albay, when we built new roads and other infrastructure within a master plan called the Guinobatan-Camalig-Daraga-Legazpi (Guicadale) Economic Township, which was the largest most ambitious government-initiated geostatic intervention of moving people and firms out of harm’s way into safe development communities,” Salceda explained.

“We established at least 40 relocation communities. New housing subdivisions are being developed within its area, while commercial and recreational spaces are laid out with road networks linking up with several towns and cities around an additional 87,000 hectares of upland areas.

This is to ease population density in areas near Mayon which are susceptible to lahar and other hazards. The same model can be applied to the Taal area,” Salceda added.

Salceda filed House Bill 5977, or the proposed Taal Eruption Recovery Rehabilitation and Adaptation (TERRA) Act, which aims to develop a long-term socioeconomic reconstruction program for communities most directly impacted by Taal’s activity, embedding adaptation in infrastructure and social investments.

“The (TERRA) plan shall be based on the principle of building back better forward which should go beyond restoring the area to its former state or condition but instead use this opportunity to leapfrog area development given its proximity to Metro Manila–the seat of economic power,” Salceda said in an aide-memoire explaining the measure.

The bill promotes the safe, sustainable, long-term development of what shall be referred to as the South of Manila Growth Corridor (SMGC) through the fast-tracking of the construction of strategic infrastructure, as well as the mapping of safe areas for industrial, commercial, and residential development, similar to what was done in Guicadale.

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