MANILA, Philippines--Everything should be looking up in business because the Department of Energy just held the so-called energy summit, and the entire business community should be jumping for joy, right?
Just wait a minute! Our contacts in business quickly pointed out that, in the past, we also had all sorts of summits. And look where we are right now!
Such a view is indeed too jaded, even for me.
Still, the theme of the summit itself speaks volumes about what the business sector could expect out of it: “$100 per Barrel: Crisis or Opportunity.”
For if such a record high price of oil still has not turned this country into crisis mode, I’m afraid we are in deep trouble.
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As far as we know down here in my neighborhood, the only step taken by the Grandma at the Palace -- in reaction to the oil crisis -- was Executive Order 691.
It basically reduced the tariff on oil, meaning, the government would lower its “cut” from the money we pay for oil products.
The lower tariff would have reduced the pump price of diesel by about P0.46 per liter.
It basically reduced the tariff on oil, meaning, the government would lower its “cut” from the money we pay for oil products.
The lower tariff would have reduced the pump price of diesel by about P0.46 per liter.
It was supposedly good for the public, according to the Malacañang press release, but it was nothing but a palliative measure.
Far from solving the problem, the executive order would create a big dent on this administration’s revenue.
Notice how the Department of Finance, while still gloating over its “accomplishments,” now only reports on the overall budget deficit.
It does not bother anymore to tell us about how well it fared in meeting the collection targets.
Somebody in the finance department forgot to tell us that the budget deficit has been narrowed down, simply because this administration sold government assets left and right.
Such, in energy parlance, is a “non-renewable” source. The time will come when the government will have nothing more to sell.
And that’s an accomplishment?
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Of course, the biggest concern of business, not to mention to us down here, is still the electricity rates. They are still way too high.
Look, all our neighbors in the region are suffering from the same soaring price of oil. We are not the only one facing the problem.
But then again, we still claim to have the distinction of having the second-highest electricity rates in all of Asia, next only to the highly industrialized Japan.
I don’t think the high price of oil caused that. I think it had a lot to do with the fact that, for a long time, our state-owned National Power Corp., or Napocor, was an electricity monopoly.
What caused the debilitating high electricity rates here? Well, you can be sure that “kickbacks” had a big role in it.
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That was the reason Congress wanted to overhaul the entire electricity sector by coming up with the law called Electric Power Industry Reform Act, or EPIRA.
Whadayano, the same Napocor, particularly the insider mafia, was lobbying hard in Congress to amend the law. Why? You can be sure it has something to do with “kickbacks.” You know, all those multimillion-dollar coal supply contracts. It is not known. One of the amendments was for us to go right away to the so-called open access system, in which industries can just buy power straight from the generating plants, without having to pass through distributors such as Manila Electric Co. or Meralco.
In effect, the Napocor mafia wanted to forego the preconditions set by the law for that kind of free market system.
One of them was that Napocor should give up its generating capacity, until some 70 percent of the country’s power production would be in private hands.
Getting rid of the Napacor monopoly was supposedly good for open competition.
Up to today, however, despite the provisions of the law, Napocor still dominates the sector.
And our beloved congressmen want to keep such a set-up?
Hmmm.
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The leading actors in the EPIRA amendment show are, of course, Rep. Juan Miguel Arroyo, a.k.a. Mickey, who is the son of the Grandma at the Palace, and Rep. Luis Villafuerte, who is one of her staunchest supporters
In private meetings during the energy summit, nevertheless, Mickey clarified to industry leaders that he was open to other ways to hasten the open access.
In other words, he was not just bent on amending the EPIRA.
Well, the move to change the law, even before it could be implemented, actually received a barrage of protests from the business community, including all the foreign business chambers here.
Their main beef was, is and always will be the effect on the investment climate. It would be bad, to put it mildly. Who would want to invest in a country that changes the rules at a whim?
Yet we need billions of dollars in investments in energy to avert an impending power shortage.
We have not built any new generating plant in years, and yet this administration was so proud of the higher-than-expected 7.3 percent growth in the gross domestic product last year. It is good news and bad news. Well, “bad” because it meant that we were using more electricity. If we keep it up, we will have electricity shortage. Only foreign investments can prevent that. And only the EPIRA can encourage more foreign investments. And so do you think that the move to amend the EPIRA is already dead? Let us see. Better yet, let us pray.
Previous columns:
In the nickel of time – 2/05/08
Mystery of the mining loan – 1/31/08
What’s P14B to SSS members? – 1/24/08
Just a temporary setback – 1/22/08
Forward ... march! – 1/16/08
