BSA III PSALMs off P75-B

CONSUMERS DEMAND!
Herman Tiu Laurel
12/12-18/2011



“Palm off: to conceal in the palm of the hand, as in cheating at dice or cards or in a sleight-of-hand trick; to dispose of or pass off by deception…”

If you’ve been carried away by the massive PR operation to keep your eyes and ears glued to the ongoing BS Aquino vs. Gloria Arroyo media saga, with a side trip to the BS Aquino vs. Renato Corona royal rumble, then you are certain to miss some of the more gargantuan swindles of the people being perpetrated by the current corporatocratic-bureaucratic conspiracy between Big Business and its captive government.

One of the scams being palmed off involves P75 billion by the Power Sector Assets and Liabilities Management Corp. (PSALM), an agency tasked by the Electric Power Industry Reform Act (EPIRA) of 2001 to privatize the nation’s energy sector, specifically the sale of the National Power Corp. (Napocor)’s power generating assets.

The already established scandal is that after 10 years and at least 80% of Napocor’s assets privatized, PSALM has still not erased Napocor’s original debt of $18 billion, which we taxpayers are saddled with. Worse, just last week, we learned that PSALM has sought approval from the Finance Department to borrow P75 billion for 2011 and P85 billion for 2012 to finance its operations, which Secretary Cesar Purisima will undoubtedly oblige.

PSALM president Emmanuel Ledesma Jr., appointed under the present government, is from Big Business. A banker, former managing director and country head of the Royal Bank of Canada, he is only one of many corporate gofers heading the different departments of government today. The others include Energy Secretary Rene Almendras from the Ayala and Aboitiz companies; Public Works Secretary Rogelio Singson who’s worked for Maynilad and was a director of Pangilinan’s Metro Pacific Investments Corp. (MPIC); while Trade Secretary Gregorio Domingo had ties with the Bankers Association of the Philippines, the Sys, Meralco, and a list of banks from Chase to Mellon Bank. Transportation and Communications is, of course, headed by cacique investment banker Mar Roxas, whom Senate staffers say can’t hold back his “mata pobre” streak; while Tourism used to be headed by Bertie Lim of the Makati Business Club, then replaced by Ramon Jimenez who used to sell ice cream and burgers but can’t seem to come up with anything so far to sell the country’s vast tourism advantages. See what I mean by a corporatist-captured government?

Ledesma justifies the PSALM palm off by claiming that his agency is already unable to meet its working capital and cash flow requirements. But what are the tasks of PSALM that it should require these billions to operate? The EPIRA tasks it to “take ownership of all existing (Napocor) generation assets, liabilities, IPP (independent power producer) contracts, real estate and all other disposable assets… formulate and implement a program for the sale and privatization of (these) assets and IPP contracts and the liquidation of (Napocor) Debts and Stranded Contract Costs… calculate the amount of the Stranded Debts and Stranded Contract Costs of NPC… (and) assume all outstanding financial obligations of… government agencies arising from their respective Rural Electrification Program.”

But didn’t the sale of 80% of Napocor’s assets raise any funds for PSALM? Where did all the proceeds go and why is the nation still saddled with an $18-billion debt exactly as it was 10 years ago?

And we haven’t even factored in the sale of Napocor’s vast transmission grid that stretches north to south, carrying power generated from its many plants across the country. If you will recall, the grid was renamed TransCo after the EPIRA was passed; it was sold off in 2008 to a group led by Monte Oro--associated with FVR and regular crony-oligarch Enrique Razon--which brought China State Grid into the picture, with the help of the Ramos-affiliated Carlyle Group. Sometime later, the Henry Sy group took over and it is now named the National Grid Corp. of the Philippines (NGCP).

That sale alone should have fetched $3.95 billion but look at what PSALM says now: “The proposed prepayment of NGCP privatization proceeds, Ledesma said, would allow PSALM to meet its cash flow requirements and avoid incurring additional loans for payment of maturing obligations. The shortfall in cash flow, he said, arises due to the mismatch in the timing of the collection of these receivables and the maturity of debt obligation payments.”

TransCo was earning around P18 billion (or $400 million) per annum when it was sold and if this had kept flowing in for PSALM, it would have lightened the burden of government and taxpayers considerably.

The sale of TransCo was supposed to bring in cash to the country’s coffers, unburdening the taxpayer; but instead, the people now have to shoulder almost a hundred billion pesos more every year. Meanwhile, the privatized transmission grid now earns $400 million for the new owners.

No wonder when San Miguel’s Ramon Ang (another gofer) was asked for advice by Henry Sy Jr., this was what he (who also got a piece of the action) said, “SMC did not spend even one peso to join that transaction; if I have then I would have to disclose that… I just advised (Sy and Coyiuto) that… it’s a super deal, but I did not participate.” In that same news report, Sy Jr. said that the acquisition will be funded “from equity and debt arranged by a foreign financial institution.”

While they are arranging the debt and earning from NGCP already, we taxpayers are made to pay PSALM to keep it going, with no cash out from the NGCP buyers at all!

Filipino middle class and masa consumers should wise up to the palming off by the oligarchy and corporatist-controlled system of government (the plutocracy or corpo-bureaucracy) of our hard earned moneys in public utilities and tax payments, and stashing them into their private and corporate bank accounts.

If we no longer allow ourselves to be misled by corporate mainstream media, then we will all see the massive exploitation and abuse we are being subjected to and scream out loud that we won’t take it anymore. Only when this reverberates loud enough will the Walls of the Corporate Jericho fall.

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