ILAW Study: Power Outages Cost PH Businesses PHP 10K Daily; Multi-faceted Approach Needed

Energy organization ILAW released a study revealing that most businesses lost PHP 10,000 to PHP 30,000 per day due to persistent power outages in their respective areas. 

During the launch of the study, “Focus Group Discussion: Economic Impact of Blackouts on Businesses in Puerto Princesa City, Baguio City, and Tagum City,” ILAW’s National Convenor, Agnes “Beng” Garcia and Youth Convenor Francine Pradez discussed the severe financial impact of persistent power issues and top grievances of business owners. The organization also underscored the urgent need for long-term comprehensive and holistic solutions. 

ILAW National Convenor Agnes “Beng” Garcia and Youth Convenor Francine Pradez discuss details of the energy organization’s study entitled “Focus Group Discussion: Economic Impact of Blackouts on Businesses in Puerto Princesa City, Baguio City, and Tagum City” before members of the media during a press conference last July 10, 2024 at Max’s Restaurant in Roxas Boulevard, Manila.

The study presented the business sector’s insights on both the short-term and long-term effects of power outages through focus group discussions in Puerto Princesa City, Palawan, Baguio City, Benguet, and Tagum City. A diverse set of participants joined the discussions comprising micro-, small, and medium-sized Enterprises (MSMEs) and larger businesses.

ILAW measured the financial impact of blackouts on businesses and segmented them into four categories: small losses ranging up to PHP 10,000 in a single day of operation; medium losses of up to PHP 30,000; large losses of up to PHP 100,000; and very large losses exceeding PHP 100,000 in the same period.

In Puerto Princesa, 40 percent of businesses incurred small losses, and another 40 percent medium losses. The successive blackouts have been reported to severely affect the area’s tourism industry, the city limited to being a “pass-through” point for tourists.

While 60 percent of businesses experienced small losses in Baguio, larger businesses like academic institutions suffered significant losses of more than PHP 100,000 in a single day of operation. Retail businesses are most affected by the power shortage in the city, having to invest in generator sets and facing production delays and damage to souvenirs that rake in revenue for locals.

Meanwhile, 50 percent of businesses in Tagum City suffered small losses, which a majority of small businesses incur. Businesses from the food & beverage industry suffer the most due to the power crisis, causing supply chain disruption, food safety concerns, and equipment failures.

Francine Pradez noted that the impact of the power crisis only starts with financial losses and creates a domino effect of disruptions for businesses. “Beyond financial losses, businesses continue to experience reduced employment and workforce efficiency, lower service and product quality reputation damage, disruption of daily activities, and worst, business closure.”

From these findings, ILAW stresses the importance of specific interventions to support businesses and, in turn, the local economy. As such, the energy consumer organization raises the call for proper government intervention, preparedness, and infrastructure development to alleviate the economic impact of blackouts on the business sector.

“This study is a testament to both the plight and plea of business owners in the country. It is time for us to not only listen to their situation but also do something about it,” proclaimed ILAW National Convenor Agnes “Beng” Garcia.

ILAW’s affiliates from Puerrto Princesa, Tagum and Baguio expressed their gratitude for highlighting the power situation for businesses in the Philippines and hope that this move will lead to improved power conditions through enhanced initiatives. “We firmly believe that our unity will significantly impact and improve the situation in the country,” said Dr. Tony Cabrestante, one of the leaders of Palawan Electric Cooperative Members, Consumers and Owners (PALECO MCOs).

According to  Beng and Pradez, ILAW seeks to push for investing in upgrading infrastructure and grid capability to institutionalize long-term growth for the country’s businesses. The energy consumer organization stressed the need for an accessible national energy roadmap that incorporates insights from diverse stakeholders and is transparent in its objectives and methodologies. Other recommendations include an energy summit to facilitate high-level discussions among industry experts, policymakers, and community leaders to develop coordinated strategies for power outage prevention.

“The Philippines is currently an energy-insecure country, putting businesses in a difficult position that risks their profitability and sustainability. With an approach rooted in collaboration, sustainability, and transparency, we can create a more resilient, equitable, and sustainable energy system for the Philippines,” said Garcia.