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November 25, 2014

Green Switch” Speech of PNoy during the Launch of SM Supermalls’ Solar Rooftop Project

[Speech of President Benigno S. Aquino III at the “Green Switch” Launch of SM Supermalls’ Solar Rooftop Project, delivered at SM City North EDSA in Quezon City, on November 24, 2014]

Speaker Sonny Belmonte; Secretary Icot Petilla; Senator Loren Legarda; Mr. Hans Sy; Ms. Tessie Sy-Coson; Mr. Leandro Leviste; Ms. Anna Marie Garcia; Congressman Boy Calalay; Mayor Herbert Bautista; Vice Mayor Joy Belmonte; Mr. Alfonso Sy; Executives and Employees of SM and Solar Philippines; fellow workers in government; honored guests;

Ladies and gentlemen, good morning.

The success that the SM Group has achieved through the years is unquestionable: Your malls, residential and office buildings, hotels, and convention centers are scattered throughout the archipelago, and even on foreign shores. Thus, it is encouraging to see the innovation and strategic clarity that has served your business so well used in endeavors, with the commendable goal of minimizing environmental impact.

This is why we are here today: to mark another milestone in SM’s history, with the launch of the solar power system that will make SM City North EDSA the very first SM mall in the Philippines to become solar-powered. I am told that, last year, you were able to energize SM Xiamen in China with 1.1 megawatts of solar energy through 3,740 panels. The system we have just launched is even bigger: with 5,760 solar panels, and is expected to generate 1.5 megawatts of solar energy, which I’m told can cover 5 percent of this mall’s average consumption per day. Given the amount of energy that the mall requires to run, such a percentage will generate savings of above P2 million a month.

We are aware that you are no stranger to initiatives like this. From moving to the use of non-chlorofluorocarbon refrigerants, to reducing the electricity consumption of 27 malls by 30.6 million kilowatt-hours in the span of a year; from participating in the Interruptible Load Program and helping to free up power when supply is tight, to this solar rooftop project, SM is indeed deservedly becoming recognized for its good practices in energy and the environment.

This is significant, in light of the challenges that will confront our energy sector in the near future. Most of you may be aware of current projections: If we do not adjust accordingly, Luzon might experience a shortage of a minimum of around 300 megawatts, to a maximum of 1,000 megawatts next summer. This is not a challenge the national government can overcome alone, which is why we are all working with all sectors to address this issue. For example, through the Interruptible Load Program, the SM group will deload 57.9 megawatts during critical times when supply falls short of demand. This might not be enough to address that shortage, but it is indeed a very significant step forward, and will hopefully spur other businesses to follow suit.

Pins hopes on joint congressional resolution

Rest assured that government is doing everything in its power to overcome this challenge. Just recently, the House of Representatives Committees on Energy and Ways and Means approved a joint resolution authorizing the national government to contract additional generating capacity to prevent this shortage. We are hopeful that both the House and the Senate will approve the joint resolution we requested sooner rather than later, in order to give the national government enough time to contract the necessary reserves.

In the long term, our goal remains the same: to ensure a reliable, preferably clean and reasonably priced, power supply. We are on our way towards achieving that goal. From 2014 to 2018, an additional 5,098 megawatts are expected to come online nationwide, while government continues to encourage investments into power.

Renewable energy is something we have all wanted to maximize. However, two limitations present themselves:

• First, that renewable energy sources are yet unable to provide what is called baseload power, which is the power requirement society needs day in, and day out.

• Second: the expense of setting up renewable energy power, which naturally translates to increased electricity prices. There is a need for government to take into consideration all these factors: for instance, how do we ease the financial burden on our countrymen, while ensuring that we have enough power for homes and industries? How do we do all this while maintaining our low-emission status? Our goal: to diversify the energy mix, and strike the right balance between renewable and traditional sources of energy.

Perks for renewable energy investments

By providing incentives such as tax holidays and duty-free importations on materials and equipment, government seeks to incentivize investments into renewable energy. Just last May, we inaugurated the San Carlos Solar Energy plant, which is the first large-scale commercially financed and commissioned solar power plant in the Philippines under our administration. Then, as today, we encourage all investors to study their options carefully and act before the cap on renewable energy has been met. Perhaps, they can also be inspired by the example of Mr. Leandro Leviste, who at 21-years old has taken it upon himself to play a role in maximizing the potential of the solar industry through Solar Philippines.

Our Department of Energy has also taken deliberate steps to promote the use of renewable energy, one of them very similar to what you have done today. Under the Solar PV Project for Private Academic Institutions (PAI), the DOE links private schools to solar suppliers precisely to install facilities like this. For the first few pilot areas under the project, schools did not have to shell out a single peso for the purchase and installation of their solar panels, which suppliers also maintain over the contract term of 15 years. Over this time, the schools are able to pay off suppliers through installments, just from the savings of electricity generated by the 1- to 2-peso difference between the cost of solar power and normal power rates.

Indeed: whether initiated by government or by businesses like SM and Solar Philippines, these kinds of projects drive home the point that renewable energy can be a competitive choice for power. The use of renewable energy sources represents a long-term investment. It plays to our country’s strengths, provides insulation from fluctuations in the international oil market and thus allows us to be more self-sufficient, generates savings in terms of electricity costs, and also contributes to the preservation of the environment and mitigates the effects of climate change.

It is because of this that I am glad to hear that SM also plans to install solar panels in SM Dasmariñas and the Mall of Asia. Of course, it is my hope that you do not stop there: that, eventually, every building that boasts an SM logo will have the same kinds of solar facilities. These are the kinds of decisions that show your corporation’s awareness of its responsibility to the environment and the society in which it operates. I congratulate you on this project, and express the firm hope that you will apply the same principles not only to more energy-related endeavors, but also and more importantly, to every aspect of the way SM does business.

Thank you, and good day.

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