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081111 PHILSTOCKS 3.0 POWER & TELECOM SECTOR NEWS [x] FIRST DRAFT [] REVISION#5

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While the Philippine stock market recovered somewhat slightly after the announcement of the United States Federal Reserve that they will keep interest rates low for 2 years, the market is still feeling the definite aftershocks of the downgrade of the United States debt rating. Investors all around Asia continue to feel the bleeding of previous gains, as the general sentiment of investors continue to wane. Consequently, they will be looking for alternate modes of investment, and gold seems to be a primary choice for many investors, as gold prices increase due to investors shifting to commodities such as precious metals. Oil, on the other hand, seems to be on a loss despite the continuing conflict in the Middle East. Even if supply losses from Libya are imputed, demand for oil seem to be lower, pushing prices downward even as global investors continue to find value in the commodity. According to Wall Street Journals Market Watch, oil has lost 9.3% of its previous value so far this year, with monthly losses of value pegged at around 13%. In response to such news, the Department of Energy has also produced an announcement to local oil companies to reflect the steep drop in crude oil prices through a PHP 2.00 decrease in local petroleum product prices until Monday. The Energy Secretary, however did not mince words as he told oil companies to comply else they face an investigation from the Department of Justice. Expectations of lower petroleum prices could at least spark a bit of demand from the general public; however this will not be enough to drive down the cost of transportation, especially in public modes of transport. Meralco has also posted lower electricity rates in July, in due part to the lower prices in the Wholesale Electricity Spot Market (WESM), which offset the higher prices of power generation pegged by the National Power Corporation (NAPOCOR). There is still much potential to be had in the continued development of the shores of Palawan for oil and natural gas, although no news have popped out since the bidding out of oil fields to different institutions. Nevertheless, energy prices are expected to somewhat drop once development of these energy sources are on their way. In another side of the coin, renewable energy is being pushed by a firm in the United Kingdom to the President after hearing news of an impending delay in implementing a Renewable Energy Act here in the Philippines. Global Green Power Plc., a biomass developer in the United Kingdom, urged the government to fasttrack the development of renewable energy sources in the Philippines. The Philippines, having many sources of renewable energy, can definitely benefit from the usage of renewable energy sources as it will free up resources from usage of crude oil and coal, which were touted as contributory to increased energy prices as of late. In pushing for legislation in favor of renewable energy, it is hoped that local

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foreign investors would find that the Philippines, aside from having a somewhat better economic climate than before, would be more than welcome to receive investments in cleaner and cheaper energy.