Dec. 18--The President signed the Renewable Energy Act yesterday. After the Department of Energy releases the implementing rules and regulations it goes into real force. Republic Act 9513 is the most comprehensive renewable energy law in all Southeast Asia.

With this law the Philippines is sure to attract a substantial part of global investments in renewable energy. Last year, investments in renewable energy worldwide reached $71 billion.

The economic meltdown may reduce the 2008 and 2009 figures. But our RE law will surely point some of the billions our way. For it gives, among other benefits, fiscal and non-fiscal incentives for renewable energy investors, including tax credits on domestic capital equipment and services, special tax rates on equipment and machinery, tax exemption of carbon credits, duty-free importation mechanisms and income tax holidays.

Implemented properly, the law will greatly reduce our use of fossil fuels for energy generation. This means we will be adding to our foreign exchange savings in the purchase of oil.

The current policy target is for the Philippines to become 60 percent energy self-sufficient. We are already more than 66 percent energy self-sufficient in the electrical power generation sector. With this RE law, our self-sufficiency in power generation could jump in a few years to 90 percent, now that--as the President said--we can "move aggressively" to develop our solar, biomass, geothermal, hydropower, wind and ocean-energy technologies.

Boon to the economy

Spending less foreign exchange for power generation and becoming fundamentally energy self-sufficient, our economic growth can achieve great leaps and maintain sustainable growth.

The cost of power will go down. This will at once make industries operating in the Philippines more profitable. Those held back by energy costs from expanding will forge on and produce for export and for the domestic economy.

Many potential foreign direct investors are attracted to our country as a site for their operations and factories. Only one thing turns them off: the high cost of electricity. The rapid and substantial development of our renewable energy resources will make this high-cost deterrent disappear.

More jobs will, as a result, be created. The Philippines could become a shining place of growth and productivity--even if the rest of the world continues to be dampened by the global crisis. For, just like China and India with their large populations, we can flourish and rise to a high level of development producing massively for domestic consumption even if our export markets shrink.