In the not-so-distant future, motor vehicles running on Edsa and other thoroughfares will be fueled by biomass, hydro dams, geothermal energy, and wind and solar power. Electric-powered vehicles and public transportation, and renewable energy sources are the new normal and the wave of the future.
They should be among the growth drivers of the Philippine economy tomorrow. And as the Ukraine-Russia conflict heats up and affects commodity prices, we need to invest in our future and reduce our reliance on fossil fuels.
We still depend heavily on imported fuel to power our transport and power sectors. We tap diesel generators in case of emergencies or power blackout. This dependence has exposed us to the vagaries of the global crude market caused by geopolitical tensions and thinning supply. Even our own reserves of natural gas are nearing depletion, raising concern about our energy security in the coming years.
We should not be many years away from massively adopting electric vehicles, in place of traditional gasoline-fed or diesel-powered automobiles. Some of our Asian neighbors are already following in the footsteps of the United States and Europe. Hyundai of South Korea last week launched the first electric car assembly plant in Indonesia. Our neighboring nation is taking advantage of its rich natural resources used in the production of electric vehicles. Indonesia, apart from being the largest nickel producer in the world, has rich deposits of copper ores, cobalt, and bauxite—the crucial raw materials used in the production of EVs.
In India, Suzuki Motor is investing $1.3 billion in electric vehicle and battery production to help the South Asian country in its bid to achieve carbon neutrality. Japanese Prime Minister Fumio Kishida and his Indian counterpart Narendra Modi signed the investment agreement in the Indian state of Gujarat to showcase India’s fight against climate change.
The Philippines can receive this kind of foreign investment through the right mix of fiscal incentives and other business-friendly policies. If there is an economic activity that can attract more foreign capital, protect our environment, and support growth in a sustainable manner at the same time, it is the development of renewable energy projects, or simply green power plants, along with the promotion of EVs.
If we are to become a high-income country, we must draw more foreign capital on top of the $10 billion that we generate annually. Singapore, a high-income Southeast Asian country with a population of just over 5 million, gets $100 billion in foreign direct investments each year.
But the Philippines, as I’ve said in my previous column, is now in an ideal position to fully reopen the economy and lure foreign investments. Our improving health situation will help us in our goal to attract more foreign capital, especially in the renewable energy sector. For one, foreign investors look for the stability and affordability of power supply, especially if they want to build energy-intensive projects, such as hyper-scale data centers.
Our private sector is very receptive to green energy, or indigenous power sources such as solar, wind, and hydropower, in support of their sustainability objectives. Many local power companies are also up to the task of meeting the rising demand for clean power from natural sources.
My own PAVI Green Renewable Energy Inc., for one, looks to expand its clean energy portfolio, especially solar, wind and hydropower projects. It is a part of our environmental responsibility, which has always been at the heart of our operations, to support sustainable and resilient communities.
Financing support and tax incentives from the government will make the renewable energy sector economically feasible. We need to ensure that we have adequate, affordable, and clean power to meet the requirements of our growing economy, including the transportation sector, which is now partly run by electricity in the forms of mass transit systems and a few personal mobility vehicles.
If we are able to fully transition to electric vehicles in this decade and most of our power plants produce clean energy, we will be in a better position to protect our economy from the fluctuation of global fuel prices and mitigate the impact of climate change for a more sustainable future. Energy security and environmental protection are critical components of economic expansion.