Economic saboteurs
| DIE HARD III |
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| Herman Tiu Laurel |
With the US financial system reeling from its asymmetrically exploding fiscal crisis; with Europe staggering amid socio-economic upheaval; and with Japan dimming in the dark cloud of its tectonic and nuclear disaster, local business news reported the inevitable: “Exports down 10.2 percent in June” from $4.557 to $4.092 billion year-on-year, or a loss of almost P25.2 billion. On top of that, the prevailing currency issue has caused the Philippine economy to suffer heavy losses. For our largest dollar-earning sectors alone — the OFWs and business process outsourcing (BPO) firms — every appreciation of the peso to the US dollar already costs billions. And we have not seen the worst of it yet.
Regrettably, even as Filipino entrepreneurs, workers and consumers are hit with these whammies, a Big Business conglomerate is, by contrast, expecting core profits to grow nearly 25 percent, with 31 percent coming from its power unit’s earnings which have grown up to 87 percent annually from 2008 to 2010. Why, Metro Pacific Investments Corp. (MPIC) CEO Manuel Pangilinan has even forecast Manila Electric Co. (Meralco)’s profits as growing “modestly” to P14 billion in 2011, which, judging from the results midway, the company seems ready to exceed by year-end.
Reports state that in the first half of 2011 alone, “Meralco’s core net income increased 35 percent to P7.82 billion on higher distribution tariffs despite the slightly lower volume of electricity sold because of the cooler weather and lower industrial consumption of power…” Hence, Meralco sold less electricity but got higher profits.
Similarly, another major component of MPIC’s profit this year — which was a surprise despite my constant monitoring of the utilities sector — has been water.
Again, on higher rates, as well as tax holidays, MWSI contributed 41 percent of MPIC’s profits.
Just the same, of all the utility services under the MPIC empire, it is still power that draws the greatest attention.
A February 2011 study by the Philippine Exporters’ Confederation Inc. (PhilExport) and the Employers Confederation of the Philippines (Ecop) entitled, “The Impact of High Energy Costs on Exports,” already named the Philippines as having the “highest power cost in Asia.” Citing an October 2010 study by independent think tank International Energy Consultants, it explained that RP’s “average retail rate of electricity of 18.1 US cents per kilowatthour… has eased out Japan at the top… at 17.9 US cents per kilowatthour,” adding, “The high cost of electricity in the Philippines was traced by the group to the fact that all costs — from producing power to distribution and taxes — are passed on to consumers… (And as) the Philippines is the only country in the region that has privatized its electric power sector and has no state subsidy on rates… (with) domestic natural gas coming from the Malampaya gas deposits in offshore Palawan… priced so high… (it is) suggested that the Philippine government renegotiate the Malampaya contract…”
Notwithstanding that, other rate hikes in power also bubbled up this past month: First, with the Supreme Court (SC) siding with both the Energy Regulatory Commission (ERC) and Meralco on a 2009 P0.29/kWh rate hike petition on purely technical procedural grounds, it makes everyone wonder whether PeNoy’s first SC appointee, Justice Lourdes Sereno, really appreciates the substantive issue of Salus populi est suprema lex (The welfare of the people is the supreme law) when she, as ponente, faulted consumers, saying, “They should be more vigilant in protecting their rights.”
And since consumer advocates have to pay for their own fares; solicit volunteer legal representation; and plod through deliberately obfuscated ERC rules and rulings, how can Sereno still claim that we consumers have been remiss? We, therefore, have to ask this of the SC, the supposed last bastion of the people’s hope for justice, which championed public welfare in 2003 by confirming the Return-on-Rate Base (RoRB), as well as vetoed the charging of corporate income tax to consumers and ordered the Commission on Audit (CoA) to sift through the books of the power giant: Has it now been captured, too?
Second, as Congress has extended the lifeline rate to consumers using 99/kWh per month or less, it means that this doleout will be exacted once again from consumers using upwards of 100 kWh per month, most of whom are also equally poor; this, despite the fact that a bleeding heart such as House energy committee chairman Rep. Dina Abad refuses to shell out a single centavo from her P380-million pork barrel.
Clearly, despite the claim that the wretched 10-year-old Electric Power Industry Reform Act (Epira) was going to bring down rates by competition via the Wholesale Electricity Spot Market (Wesm), what happened was the exact opposite: It more than doubled charges! In fact, privatization has not reduced the $18-billion National Power Corp. (Napocor) debt at all.
Then, as if these were not enough, we still have to contend with the ERC’s approval of a P4.5-billion Napocor petition for increase of P0.07/kWh starting August to cover for “losses” from its 2003 to 2009 “missionary” electrification operations.
With such economic saboteurs, the destruction of our economy and the people’s welfare is sure to never cease — that is, until the nation revolts against the entire system.
(Tune in to Sulo ng Pilipino/Radyo OpinYon, Monday, Wednesday, Friday, 5 to 7 p.m., and Tuesday, Thursday, 5 to 6 p.m. on 1098AM; Talk News TV with HTL, Saturday, 8 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable Channel 8; also visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)
(Reprinted with permission from Mr. Herman Tiu-Laurel)
Source: The Daily Tribune
URL: http://www.tribuneonline.org/commentary/20110815com5.html
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