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1.01.2007

On Biofuels

Last Monday, Philippine newspaper headlines announced the business community’s applause over last week’s ASEAN SUMMIT accord, calling for the extensive use of biofuels. A few days before that, the Philippine President, signed the “Biofuels Law” that requires all vehicles to use petroleum mixed with 5% biofuel.

The use of biofuels as an additive (extender) or fuel source is exceptionally deserving of praise. It is expected to reduce the state's dependence on imported petroleum and trim the need for dollar reserves that are used to pay for the country's importations. Furthermore, a lesser dependence on imported fuel is expected insulate the local economy from fluctuations in both: the world oil prices, and; the value of the US currency. On top of all that, biofuels are environmentally friendly. It reduces harmful emissions therefore, making the air more breathable.

However, “I have a big BUT-T here!”

For quite sometime now, Philippine agriculture has failed to produce enough food for the local economy. As a matter of fact, the country continues to import rice, sugar and other agricultural items. In addition, the country’s poverty incidence even increased in the year 2006.

With so much focus being given on bio fuels and its potential as a source of income, there is A GREAT possibility that food production will be given lesser attention. Por ejemplo, sugarcane harvests may suddenly be diverted to ethanol production, should the hacienderos find it more profitable to sell biofuel. In such an event, it is very possible that the sugarcane plantation employees, who counts among the poorest of the country's poor, will suddenly find it difficult to have access to sugar.

Should that happen, the country’s Gross Domestic Product might actually show an increase but without any real benefit to the country’s poor. With so much focus to be given to biofuel, food production may decline. And with more people in the countryside getting hungry in 2006, what will happen to the country's poverty incidence from 2007 and beyond?

In my opinion, the state should push through with the biofuels project. However, it should take steps to ensure that it will not interfere with the current efforts to boost food production. In addition, other renewable energy projects (windmill, solar, etc..) should also be given strong emphasis.

With the current trend of population growth, it will not be long before the country's agriculture will be needed solely for food production.

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