MANILA, Philippines -- The low power rates and lack of development in the Mindanao energy market have discouraged firms from pouring in more investments in the region, the head of Aboitiz Equity Ventures Inc. said on Tuesday.

"In Mindanao, there was reluctance from private sector to come in partially because of the low rates and partially because the markets are not yet developed," Erramon I. Aboitiz, chief executive officer and president at AEV, said at the Philippines Investment Forum organized by Euromoney.

"However, we're beginning to see some capacity being built there although the whole structure in Mindanao is still evolving," he pointed out.

Aboitiz was comparing the Mindanao power situation versus Luzon and Visayas, where the energy market is seen to be in "good shape." Analysts have previously cautioned the government that the power supply in Mindanao is not enough to cover projected demand in the next few years.

"In Luzon and in Visayas... you're seeing a lot of new capacity coming in, new power plants coming from both existing players and new players attracted and getting into power," Aboitiz said.

AEV has a diversified portfolio although its power arm contributes the most to the group's revenues.

Aboitiz noted the country currently faces two issues in the power sector: providing ample supply and keeping costs down.

"What we're seeing today is power developers are bringing in supply at the least possible cost because we have to remain competitive in the market," Aboitiz explained.

He also said that despite the perception of the public that power rates are generally expensive, these have actually come down from the previous years with the entry of different players.