Investments and Cha-cha

CONSUMERS DEMAND!
Herman Tiu Laurel
8/29-31/2011



Power rates in Vietnam are $0.05/ kWh; Thailand, $ 0.15/kWh; and in the Philippines, from $0.21 to $0.25/kWh today.

However, ours will even get higher, especially when new rate hike petitions, including renewable energy (RE) feed-in tariffs as well as the huge jump in the Universal Charge of the Power Sector Assets and Liabilities Management (PSALM) Corp., are approved. This is the REAL reason Philippine foreign direct investments (FDIs) are at a dismal $1.7 billion compared with Thailand’s $6 billion and Vietnam’s $8 billion.

The claim of Senate President Juan Ponce-Enrile and House Speaker Feliciano Belmonte that Charter change (Cha-cha) to open up ownership of Philippine lands, alongside other national patrimonies, plus media and other sectors to foreign capital will bring in FDIs is a big fat lie. Foreign land speculators in cahoots with local land grabbers/ bankers will be the only ones who will reap the bonanza while ordinary Filipinos will be priced out of owning their own land. By then, transnationals would have gobbled up majority of the nation’s natural wealth and public franchises.

The real alternative is retention of protection for Filipinos and nationalization of large scale industries for all to benefit

Off the Mark
Can we trust the likes of Enrile, who, aside from being a confirmed dagdag-bawas beneficiary in the 1995 senatorial elections, admitted in 1986 to his faked assassination in 1971 to justify the declaration of Martial Law? Can we trust Belmonte, who was instrumental in passing the Electric Power Industry Reform Act (EPIRA) in 2001 through the lame duck Congress after Edsa Dos by distributing P500,000 to each congressman from the oligarch-beneficiaries of the law, which gave us the “highest power rates” in Asia for the past 10 years? Can we even trust Misamis Occidental Rep. Loreto Leo Ocampos, chair of the House committee on constitutional reforms, or his aptitude for math when he declared, “I think our FDIs will TRIPLE from the current $2 billion to $3 billion once these constitutional reforms are implemented…”? As the promised Cha-cha reforms are sure to be massively off the mark, they are, in turn, right on track with the desires of the IMF, World Bank and ADB that are egging for it.

In fact, the track record of “reforms” of the Philippine Congress the past 25 years doesn’t inspire confidence at all – which is why it is scary that they are brandishing the term again. Consider some of the key REFORM packages Congress had championed and passed into law since the Edsa I “People Power” government, beginning with the Comprehensive Tax REFORM Program (CTRP) that replaced the progressive income tax system with the regressive value added tax (VAT) that transferred the tax burden to the vast majority of middle and low income consumers.

Also, consider the trade REFORM laws passed in the early ‘90s that introduced liberalization, deregulation, and privatization – now casting a curse on the Philippine economy, spurring uncontrolled fuel and power rate hikes, debilitating peso fluctuations, and privatizations that socialize the debts while privatizing the profits.

Oh, lest we forget: The EPIRA wouldn’t be called the Electric Power Industry REFORM Act for nothing – for it simply raised our electricity rates to the highest in Asia, if not the world!

Net Invasion
This Cha-cha for FDI campaign has been massive – so massive and multi-media in fact that it has invaded the Net. I have had a few run-ins with its advocates who use as bogeyman, the “privileged, favored and protected, abusive and exploitative Filipino oligarchs” like the Lopezes, Cojuangcos, et al., who take advantage of the Constitution’s protectionist provisions to monopolize businesses and keep out foreign capital at the expense of free market competition. But is this so? Isn’t it a fact that in many of the oligarch-controlled companies such as PLDT, San Miguel, Petron, etc., foreign capitalists are the major partners of these local oligarchs or, in the case of PLDT, the ones who actually control these companies via majority voting shares?

A look at the Asean website’s “Foreign Equity Policies” section already gives us an overview of how certain of its members conduct themselves on this issue. In the Philippines, for instance, it says that “100 percent foreign equity ownership is allowed in all areas except those in the negative list under the Foreign Investment Act of 1991 as amended.”

As for Thailand, “The 1972 Alien Business Law grants foreigners permission to engage in certain business enterprises… only if more than 50 percent of the capital is owned by Thai Nationals. However, for BOI promoted companies, majority foreign ownership is permitted for projects that export not less than 50 percent of sales.”

Meanwhile, even as Vietnam’s foreign equity rule there appears liberal, where “100 percent foreign equity ownership is allowed” – and this is a phrase often cited by the likes of AntiPinoy.com to buttress their point – it appears to be more of a simplistic reading of its Law on Foreign Investments, Art. 4, Sec. 3, which, if we were to go by a May 2011 US State Department investment climate assessment, is nuanced as follows:

“There are ownership limitations… Foreign ownership cannot exceed 49 percent of listed companies and 30 percent of listed companies in the financial sector. A foreign bank is allowed to establish a 100-percent foreign owned bank in Vietnam but may only own up to 20 percent of a local commercial bank. Individual foreign investors are usually limited to 15-percent ownership, though a single foreign investor may increase ownership to 20 percent through a strategic alliance with a local partner.”

Difficult Challenge
Let’s just keep in mind that no country will ever give away protection of its interests and concerns, much less, the privileges of its own people. Local PR pushers for this Cha-cha for FDI are pulling the wool over many Filipinos’ eyes. What everyone should realize is that a major factor in any country’s investment climate is the cost of power or electricity. Even our detractor, Bangko Sentral ng Pilipinas Deputy Gov. Diwa Guinigundo, had to admit in a private NEDA briefing that “the most difficult challenge for the national government and the private sector (is) addressing the high cost of power in the country.”

However, Guinigundo, along with our senators and congressmen, don’t seem to have the balls to say this out loud in national media: That the exorbitant, predatory, and murderous power rates are the real reason FDIs shy away from our country. Instead, most of them lie, steal, and sell our nation out.

Filipinos should thus act now to stop their national swindles through Cha-cha. Write to newspapers; text radio programs; and send hate mails to those blasted legislative proponents. LET’S DEMAND OUR BIRTHRIGHT FOR PROTECTION IN OUR OWN LAND AS FILIPINOS AND TAXPAYING CITIZENS!