Effects Of Energy Crisis on the Philippines’ Economy
By: Juvelyn Y. Teves
Introduction
Several production and consumption processes require energy as a fundamental input, making it a major driver of economic growth. One of the key components in the development of the economy is energy. The utilization of energy, from a physical standpoint, is essential to the functioning of any contemporary economy since it drives industrial development and economic production [1]. Growth is impossible without access to energy, and increased economic activity will increase energy consumption.
The Philippines is one of the most fast-growing economies of the East Asian Pacific Region [2]. The country’s gross domestic product has grown by 5.4% annually on average over the last 10 years [3]; the nation intends to boost GDP growth to 7% by 2040 [4]. Higher energy demand growth will be a result of the anticipated, faster GDP development. However, the country is now facing a mounting energy crisis as the Malampaya Gas Field is now depleting.
The Malampaya’s Gas Field
One of the biggest and most important industrial projects that have ever been undertaken in the Philippines is the Malampaya Deep Water Gas-to-Power project. It has generated cleaner- burning natural gas that powers five power plants in Luzon with a combined capacity of 3,200 megawatts. This lowers the country's reliance on imported oil, increases the reliability of the supply of cleaner energy from domestic sources, and meets up to 20% of its energy needs.
However, the Malampaya is now slowly depleting and it is expected to be depleted in 2024. Sudden power interruptions and shortages are now visible to the neighboring town. Due to the fact that 20% of the country's power, or 30% of Luzon's electricity needs, are met by natural gas from Malampaya, there are also significant worries that prolonged rotating blackouts and rising generation costs may become more common if the gas field's supply is stopped, restricted, or worse, depleted. As a result, the economic recovery of the nation as a whole as well as low- income families may suffer significantly [5].
Conclusion
Energy is seen as an economic growth engine. If the energy crisis in Malampaya's gas field is not resolved before it runs out, it may thereby contribute to the Philippine economy's decline. The country's present energy issue will make it difficult for the country to increase GDP growth in the upcoming years.
Comments
Post a Comment