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Economic forecast 2024


My Cup Of Liberty

(Part 2)

On Nov. 22, I attended part of the BusinessWorld Economic Forum (BWEF) 2023 which had the theme “Forecast 2024” at Grand Hyatt in BGC Taguig City, and Stratbase’s “Pilipinas Conference 2023” at The Peninsula Manila in Makati City. Since they occurred on the same day, I chose certain sessions from each to attend.

In the morning, the Stratbase conference featured the government economic and infrastructure teams while the BWEF featured the regional heads of multilaterals Asian Development Bank (ADB), the International Monetary Fund (IMF), and the World Bank (WB).

Finance Secretary Benjamin Diokno reiterated that the Philippines is one of the fastest-growing countries in the fastest-growing region in the world. Budget Secretary Amenah Pangandaman said that their priorities are Procurement law amendments, government rightsizing, cash budgeting, and open government partnership (OGP). She said that these will complement fiscal consolidation and help keep the fast growth trajectory and sustain it, create more jobs and reduce poverty.

In the afternoon at the BWEF, I watched the panel on “Equipping energy for greater demand” and the speakers were Anthony Oundjian of Boston Consulting, Emmanuel Rubio of Aboitiz Power Corp., and John Eric Francia of ACEN.

I was surprised by Mr. Oundjian’s opening slide about a “current energy crisis” because I do not believe there is an energy crisis (or an oil crisis, a transport crisis, a food crisis, a health crisis, a climate crisis…). These are hiccups where cheap energy like oil and gas from Russia were shunned due to politics and the war.

Mr. Francia said that for 2024, the normalized growth is between 5-6% and there is adequate supply to address higher electricity demand, and that his company will have 1,000 MW of new renewable energy (RE).

Mr. Rubio has a more down-to-earth explanation of meeting power demand and supply. He said that the variability of renewable energy must be considered in planning an energy transition, that in other countries variable energy generation has a cap. That the Philippines still needs reliable, stable, and affordable energy and in comparing thermal vs RE, the full cost including ancillary services and batteries should be included.

Jerome Cainglet of the Energy Dev’t Corp. (EDC) was also supposed to be one of the speakers, but he did not show. EDC is focused on wind power and geothermal energy.

I still believe that the Energy department’s disallowance, since the previous administration, of new or “greenfield” coal projects is wrong. If our focus is on more growth and more electricity for our businesses and households, coal has provided that to many countries for many decades.

In the accompanying table I compiled data on four rich European “decarbonizing” economies that significantly reduced their coal use, and big population Asian countries with rising coal consumption, plus Turkey.

Decarbonizing Europeans with declining coal use have had anemic growth of only 1% to 1.6% from 2012-2022 while developing Asians with rising coal use have fast average growth of 4% to 6.5% yearly. Again, there are many factors for why a country has fast or slow growth, but the fossil fuel input is among the important factors.

The Philippines’ 6% to 7% annual GDP growth target for 2023 and beyond will require similar growth in power generation, meaning a 6-7 terawatt-hours (TWH) yearly incremental increase over some 100 TWH in 2022.

If we expand by only 4-6 TWH yearly, growth will be affected and compromised to roughly 5% or less. We do not want that. We have the momentum already, with 5.6% growth in Q1-Q3 this year, and this is projected to grow at 6.2% to 6.5% in 2024 (according to ADB and AMRO projections). We should not douse this momentum.


Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers.