IN response to a possible eruption of Taal Volcano, an economist-lawmaker on Monday called on the national government to make preparations to save energy and manufacturing sectors in Batangas area.
“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,” said House Committee on Ways and Means Chairman Joey Sarte Salceda of Albay.
According to Salceda, 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,” he added.
Use CREATE
The lawmaker said the Board of Investments (BOI) and the Department of Energy (DOE) should use the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law 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 percent 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.
The lawmaker said DOE and the BPI should come up with strategies to encourage power generation companies to diversify their production bases and use CREATE to make such diversification financially viable.
‘Reimagined’
Meanwhile, Salceda also cited the 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.
He said the idea to encourage development outside the danger zone, by putting up the necessary infrastructure support, economic incentives, and policy direction for more resilient development.
“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 earlier 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.