Sunday, April 29, 2012

Missing the golden opportunity

BACKBENCHER
Rod P. Kapunan
4/28-29/2012



The Supreme Court decision declaring final its November 2011 ruling ordering the distribution of the remaining vestige of feudalism in this country now stands as a historic decision. That decision came at a time when the justices who were by appointed the previous administration are sought to be ousted and isolated. Unfortunately, despite the epochal ruling, the Aquino administration and its succeeding variety who, since 1986 have proclaimed themselves the beacon of our freedom, failed to understand that in this context freedom means the emancipation of the farmers from the bondage of the soil.

President Aquino miserably missed the golden opportunity of making himself a part of that history that saw by judicial fiat the phasing out of the slave-like feudalism in the country practiced no less than by the country's leading political hypocrites. The decision to distribute the 4,915.75 hectares of that infamous Hacienda Luisita is not an indication the courts of law had won in the land where the proverbial "rule of law" has been reduced to a mere parable often invoked by political kingpins, but reaffirmed that we still have a pulsating judicial system despite the notoriety of unbridled corruption. The decision delivers an ominous signal the Supreme Court is not a fence-sitter or a political appendage of the highly politicized executive department.

There was in that decision an assertion, despite the recent trauma generated by political tantrum, that the High Court is still capable of coming out with an independent judgment on a legal issue but often tends to metamorphose to a political issue. The decision has triggered a much deeper political impact, especially to the class who still nurtures feudalism as the backbone of their economic base. Maybe the presence of embattled Chief Justice Renato Corona highlighted the deep-seated contradiction between the Judiciary and the Executive branch, but still the chief justice managed to put a niche for himself by exhibiting what many of our people thought the "stupor decisions" that regularly comes out from the mill of judicial mediocrity.

In a narrower sense, the decision serves as a dire warning that the chief justice still wields a political clout within his turf; that should this lackluster government dare to push its luck, he could cause the entire political structure to tailspin. On a wider perspective, the decision is a reminder that the Judiciary remains an independent branch to reckon with; that it possess the same degree of power to blunt all attempts to politicize the courts, like the nasty practice of appointing minions acting more as acolytes than as judges and justices.

Some interpret the decision with less enthusiasm for the fact that only eight voted, while six voted against that specific resolution. However, they failed to decipher that those who voted were not against the substance of the issue that was resolved, which is to subdivide the feudal manor of the Cojuangcos, but on the amount to be compensated. In fact, we are the only country on this planet that continues to uphold compensation to every property taken when that right is conditional; that it could automatically be forfeited if it has been established the party seeking compensation violated the contract or has shown defiance to disobey the law or judgment.

The stock distribution option was in defiance of the Constitution that was tailored-made no less by the President-landowner to circumvent Section 4, Article XIII of the 1987 Constitution. More than that the minions of the yellow horde that lorded Congress proceeded to enact an outrageously unconstitutional law by passing R.A. No. 6657 to justify the giving of a scrap of paper instead of land as what land reform literally implies.

In that landmark decision, the justices exhibited the kind of political will our people did not expect. In fact, our common notion is only the executive branch of government is expected to exercise political will. Even on that score, our good-for-nothing landlord-President failed to grasp that his alleged popularity is below par from what normally is expected from a very popular President. He failed to take note the equation that it is not on how many voted for him, but on what he did while in office, which now tend to prove the lingering suspicion that his popularity was all propped up by his American handlers and by the mainstream media representing the various economic blocs in this country.

Indeed, the Hacienda Luisita decision helped much to boost the image of the Supreme Court that was badly battered by the political hijacker who appointed Corona to his post. But instead of rectifying that grave error, President Aquino aggravated the situation by commingling law with politics. Aquino has become brazen this time trying to bend and mold the institution for it to bow down to his whims. His brusqueness is detected as an attempt to cover up his incompetence. He is even childishly threatening to unleash anew his primeval "people power."

Thus, instead of cashing in on the bandwagon calling for land reform, he now tries to deflect that significant decision by refocusing on a problem there is no way we can resolve without the other party cooperating with us, and our possible conflict with China could only expose as fleeting our ecstatic euphoria of democracy and freedom, but that we have in our midst an absolute political dud.

(rodkap@yahoo.com.ph)

Friday, April 27, 2012

The Malampaya template

DIE HARD III
Herman Tiu Laurel
4/27/2012



One headline declared, "RP to bring Panatag Shoal dispute to US," citing the upcoming meeting of Foreign Secretary Albert del Rosario and Defense Secretary Voltaire Gazmin with top US defense officials scheduled late this month. Just what do they think will this bring to the Philippines — aid or ridicule? Frankly, I see us only getting the latter — if not openly, then the suppressed snickers of neighbors and many in the world.

The Philippines is certainly not showing the self-respect and confidence Vietnam displayed in its face-off with China. But with the kind of leadership this country has been getting, should there be any surprise there?

Another question is, what can the Philippines really expect from the US, other than the mischievous, ambiguous comments of its representatives? It was reported in the funniest manner by some local newspapers that "A senior US commander in the Pacific reaffirmed the United States' mutual defense treaty with the Philippines Sunday amid increased tensions between the archipelago and China. In the strongest comments yet… on the South China Sea dispute, Commander of the US Marines in the Pacific Lt. Gen. Duane Thiessen said the Philippines and US were bound by a military agreement… 'which guarantees that we get involved in each other's defense and that is self explanatory…'"

Self-explanatory he says. Well, coming from a Marine, that's explanatory enough. Ever wondered why they invented the wisecrack, "Tell that to the Marines?" Now, we Filipinos should know — from the mouth of a US Marine.

If anyone needs to be reminded, the US declined to assist the Philippines when our country was defending its life against the foreign-funded Moro National Liberation Front (MNLF), or when we were fighting tooth and nail to reclaim Sabah.

The Scarborough affair brings the issues of Philippine territory to the forefront again, and mainly for one fundamental reason — economic resources. There would be much less controversy over those shoals if it were not the fact that vast amounts of increasingly valuable fossil fuel resources exist in those areas.

China is the single most common factor in the China Sea whose historical and argued legal claims cover areas most Asean countries also individually lay claim to. But over the past decade, China and the Asean have in concert made determined efforts to emphasize that the territorial disputes will be settled peacefully through negotiations.

The firmest arguments have been between Vietnam and China, and lately the Philippines and China. Vietnam has proceeded to explore oil in areas disputed with China, but guess what — with Russia and India. China objects but what can it do against Vietnam's ventures with two other members of Brics (the grouping of Brazil, Russia, India, China and South Africa)? That's political savvy if you ask me. And, unlike the Philippines, Vietnam isn't staking its bets with a very bad partner like the US.

The Philippine diplomatic and military officialdom's straight path to Washington's defense door, seeking solutions to what is mainly an economic issue, is inexplicable. There is basis to believe that this scenario is really being set up by the US itself, using the usual Philippine stooges that the former colonial power still maintains.

The United States seems to be totally in control of Philippine initiatives with regard to territorial and economic issues, especially in our disputes with China. The situation is such that we hear from Chinese-Filipino sources close to mainland Chinese businessmen (like those recently feting new generation Asean overseas Chinese tycoons here in Manila), as well as Chinese embassy officials here and in Beijing, that China is frustrated with BS Aquino III's constant refusal to engage in sincere dialog, given that it is ready to offer very generous conciliation terms, giving credence to the word that China considers the Philippines a cause lost to the US.

The Philippine government is exhibiting on the Scarborough and South China Sea disputes a strategy that is clearly centered on using the US as a counterweight, which will necessarily commit the Philippines to binding with US interests. There is by now a template for such a situation — Malampaya.

The Malampaya gas-to-power project off Palawan is where the Philippines gets only a 10-percent share while British and US interests, namely, Royal Dutch Shell and Chevron-Texaco, gobble up 90 percent. But get this: The disposition of paltry Philippine royalty revenues are even being redirected, on orders of Uncle Sam, to such worthless purchases as the vintage US Hamilton cutters (renamed BRP Gregorio del Pilar), announced by Navy Adm. Jose Luis Alano as being used not to stem smuggling or other forms of economic sabotage but to secure Malampaya.

Thus, if we go by this Malampaya template, Filipinos will be losing out again in very one-sided and onerous deals on Scarborough and other areas if these are bound to US dictates as expected.

China and the Philippines can and will have a win-win strategy, but only if Philippine authorities break away from US-centered and inspired conflict strategies and begin opening sincere dialogues with Beijing.

Manila will immediately begin to hear sweet music as China invests its huge dollar reserves and offers sharing deals that are 10 times better than Malampaya. With a new, better deal, the Philippines can in turn start telling Shell and Chevron to go to hell unless they agree to a 50/50 sharing of earnings, lest the whole gas facility be nationalized, just as what Argentina did to Spain's Repsol Oil.

With such a move, China can only highlight the imperial iniquity of Western deals with the Third World and win the goodwill of all nations without any rumbles of war, while the Philippines will get an instant leverage against unilateral and onerous Western-styled PPP (Public-Private Partnership) deals that are inimical to all Filipinos.

(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on "China, Chito, and Us Filipinos," with China expert Chito Sta. Romana; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Thursday, April 26, 2012

Plutocrats' 'in-Serge-ency'

CONSUMERS' DEMAND!
Herman Tiu Laurel
4/23-29/2012



"We, the sovereign Filipino people, imploring the aid of Almighty God, in order to build a just and humane society, and establish a Government that shall embody our ideals and aspirations, promote the common good, conserve and develop our patrimony, and secure to ourselves and our posterity, the blessings of independence and democracy under the rule of law and a regime of truth, justice, freedom, love, equality, and peace, do ordain and promulgate this Constitution."

Even if that 1987 Constitutional Commission had a severely flawed representation, being an appointed body, its members still had the basic sense to acknowledge and declare in writing the basic democratic economic and political principles in our preamble. Notice the particular focus on promoting the "common good," conserving and developing our "patrimony," and securing to ourselves and posterity "a regime of truth, justice…equality…."

Yet, the actions we have seen the past months from some of the country's political leaders on the Mindanao power supply and price crisis betray the fundamental intentions stated in the Constitution: The blatant lies to enforce the monopolization and amassing of plutocrats' wealth and power; the promotion of elite and plutocratic welfare against the common good; the insidious sabotage of the natural jewel that is the beautiful and powerful Agus-Pulangi hydroelectric complex flowing from the majestic Maria Christina Falls; and the blatant use of political position to obstruct the will of the people and dictate upon them.

To highlight these charges, we narrate these self-evident acts of omission and commission by the political-economic authorities of the present plutocrat controlled regime: The two-year neglect of the long reported and longstanding clamor for the dredging and de-silting of the Agus-Pulangi that is the direct and immediate cause of the calamitous Mindanao power shortage; the deliberate idling of operational Power Barges 101, 102, 103, and 104 that could have prevented the shortage; the privatization to the Aboitizes of Power Barges 117 and 118 in 2009 when Mindanaoans have opposed this knowing these would be needed for possible seasonal power shortfalls; support for the blackmail by the Aboitizes of withholding power unless high priced, long-term contracts are signed by Mindanaoans; presidential inaction despite existing legal powers to mobilize Iligan City's 104-megawatt (MW) BOT power plant coveted by the Alcantara oligarchs; the imperial dictation by BS Aquino III and Sen. Serge Osmeña to Mindanaoans to just swallow high power prices and sign onerous contracts; and the list goes on.

After the Davao Power Summit of April 13--a summit that produced only vomit amongst the Mindanaoans and opinion writers, such as Dick Pascual of Philippine Star who wrote "Goal of power summit was to sell higher rates?" and Armando Doronilla of Inquirer who coined, "Monologue, not dialogue, at the power summit," as well as criticisms from the Apostolic Vicariate of Jolo, Bishop Angelito Lampon and Bishop Dinualdo Guiterrez, who said, "Hindi naman kasalanan ng mga taga-Mindanao kung bakit nagkakaroon ng power crisis sa rehiyon. Kasalanan ng pamahalaan ang power shortage dahil sa kanilang kapabayaan at mga maling polisiya..." over Radio Veritas, among thousands of adverse reactions--a convening of the Joint Congressional Power Commission (JCPC), the body tasked by the EPIRA (Electric Power Industry Reform Act) power privatization law to oversee its implementation, was scheduled posthaste for April 19 as a positive step toward finding solutions to the crisis; but just a few days before the hearing its co-chair, Sen. Serge Osmeña, cancelled and postponed the hearing for another month.

What was Osmeña's reason, or excuse, for calling it off? Manila Standard Today reported: "In announcing the cancellation of the April 19 hearing, Osmeña said he also took pity on the resource speakers such as Energy Secretary Jose Rene Almendras, who would have to repeat what they said during the Mindanao Power Summit on April 13 (saying) 'I pity the resource persons who will have to do it again. So I moved the briefing to May 10 so legislators will be in Manila.'"

Osmeña can take pity on a handful of officials but not on 25 million Mindanaoans who are already suffering the consequences of the delay? At the same time, the co-chair of the JCPC from the Lower House, conjugal partner of Budget Secretary Butch Abad and Batanes Rep. Henedina Abad, would be absent on April 19; hence, another reason for the postponement. With public officials such as these, does the country still need external enemies to meet with destruction?

Insurgency is defined as "the state or condition of being in revolt or insurrection" and it is normally applied to the oppressed peoples struggling against the powers-that-be; but here in the Philippines, we see the opposite happening.

While the Philippine Constitution is very clear in its preamble that the government exists to "promote the common good, conserve and develop our patrimony… under a rule of law and a regime of truth, justice… equality," what we are experiencing in the events around the Mindanao power crisis is the BS Aquino III government and its political and cabinet collaborators promoting the vested profit and monopoly interests of a handful of oligarchs; sabotaging our cherished national patrimony, the Agus-Pulangi; lying, cheating, blackmailing, oppressing, and tyrannically imposing their diktats on the people.

The epitome of what they are doing against the welfare and democratic aspirations of the people in this case is Sen. Serge Osmeña who sits in his Senate Energy Committee perch despite conflict-of-interest that's not only clear by his actuations but also by his relations with the Lopezes--in other words, the plutocrats' "in-Serge-ency."

What we are witnessing in the Philippines is the insurrection and rebellion of the plutocrats, a successful one at that up to this date, against the principles of democracy and common good enshrined in the Constitution, in the promotion of plutocracy and the plutonomy (the economy of, for and by the plutocrats).

If the people of Mindanao are to survive and prosper, as those in Luzon and Visayas should already realize after 10 years of EPIRA and power privatization, the people's rebellion and genuine insurgency must start, with the nation fighting back to reclaim the "commons" or our common wealth and patrimony.

Some leaders of Mindanao are now beginning to organize the people's rebellion there. Former Misamis Oriental Gov. Homobono Adaza has started the call to organize the "Mindanao Action Party" to field candidates in the next senatorial elections, capture at least four seats, and thereby take the Mindanaoans' power struggle to a higher plane and reverse the rule of the plutocrats there. Luzon and the Visayas should follow suit and support these fighters from Mindanao where the Spaniards and US colonial forces found their Waterloo in centuries past.

So with that we say: Down with the plutocrats' "in-Serge-ency." Let us raise the call for a national "jihad" against the plutocracy. Let us lift the banner of the genuine popular rebellion and insurrection until the people are victorious!

(Tune in to 1098AM, DWAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on "Mindanao fights the oligarchs" with Bono Adaza, Jojo Borja, and Norminco VP Capt. Matias; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

A rendezvous with disappointment

AN OUTSIDER'S VIEW
Ken Fuller
4/24/2012



Supporters of Aung San Suu Kyi, leader of the National League for Democracy, were understandably delighted when the NLD won all the 44 seats it contested in Myanmar's April 1 by-elections. Presumably they believe that the day when Myanmar embarks upon the road to development and freedom is close to hand.

At the risk of being accused of being a curmudgeonly iconoclast, however, this outsider believes there is a strong chance that such supporters have a rendezvous with disappointment. After all who, in recent months, have been Aung San Suu Kyi's most vociferous international backers?

Last Dec. 2, fresh from her regime-change exploits in the Middle East and North Africa, US Secretary of State Hillary Clinton flew in and, accompanied by a team from the State Department and the US Embassy, met Aung Sang Suu Kyi for talks, the contents of which were not divulged.

Then, on April 13, following the NLD by-election victories, in came UK Prime Minister David Cameron on the last leg of a Southeast Asian tour to promote UK interests. The significance of this visit may be judged by the fact that Cameron was the first incumbent British leader to visit the country since independence in 1948. Accompanying him were 10 members of the business members of the tour, including "defense" company representatives, although Cameron's spokesmen were anxious to claim to the BBC that they were merely conducting "cultural" activities. Yeah, right.

What is happening here, of course, is that Western leaders, knowing full well that Myanmar's "democratic" reforms will result in openings for the transnational corporations whose interests they represent, are now hurrying to secure a place at the head of the line, preparatory to an undignified stampede once the doors swing open.

Cameron is well aware of the economic opportunities in Myanmar. On April 15, Richard Eden disclosed in The Telegraph that the British PM's mother-in-law, Lady Annabel Astor, established a company called Oka in 1999 to import rattan products from, among other countries, Myanmar. Embarrassed by the inconvenient human-rights outcry, the imports were suspended in 2007 but resumed the following year. Last year, the Viscountess Astor predicted that Oka was "three or four years away from 100 million pounds."

Cameron's in-law has, writes Eden, "turned Oka into one of the country's most desirable furnishings companies. It hit the headlines when it featured on the expenses claims of some of Cameron's allies, such as those of Michael Gove, the Education Secretary." (This refers to a quaint British practice whereby some politicians make fraudulent claims on the public purse regarding their homes and furnishings — small stuff by Philippine standards, although some of the practitioners are now behind bars.)

Be that as it may, surely the fate of Myanmar does not rest solely in the hands of Western economic interests? Surely Aung San Suu Kyi would not allow them to pillage her country? Surely the program of the NLD calls for an economy run by, and in the interests of, the people of Myanmar? Frankly, there appears to be something of a problem here.

If the NLD has a program, I have been unable to locate it. The closest I've come is the speech by Aung San Suu Kyi on March 14, when she outlined the party's "policy, stance and work programmes." Here, she explained "our ambitions for the nation and the people along with the principles that have been upheld for more than 20 years." The NLD's three priorities were "the rule of law, internal peace and constitutional amendments."

Regarding the first of these, she called for the abolition of "some outdated rules oppressing the people," the creation of an independent, "upright" judiciary, "complete press freedom," and the extension of "supporting networks of law to help the people." On the peace question, the NLD calls for a national ceasefire, negotiations, and the search for common ground in the construction of a "genuine democratic Union," as opposed to secession. As for the constitution, the NLD somewhat hazily believes that all representatives, "including united military forces, are to work together to amend the constitution with a sense of serving the interests of the nation only without attachment to own party and own group and personality cult."

Finally, we get to socio-economic questions. There are some welcome proposals here, such as the formation of "united farmers unions" to freely represent the interests of farmers, the legal protection of labor rights and the formation of labor unions, the abolition of forced labor, the equal treatment of all workers and protection against unemployment.

But what will the economy look like? Will Myanmar attempt to industrialize? What will be the balance between public and private, local and foreign enterprise? The speech was silent on such matters. Instead, voters were told that the NLD would "focus on seeking necessary international assistance for development of the nation," and that "it is required to make a shift to market economy with a right balance between freedom, stability and social justice, based on the rule of law."

So, there will be a market economy. But that is not all. "It is required to closely cooperate with the International Monetary Fund, International Finance Commission" — possibly a reference to the International Finance Corp., which finances private-sector projects in the developing world — and the World Bank for the development of "all State-run and private-owned businesses. NLD is paving the way for such cooperation right now."

The frequent use of the term "it is required" suggests that the speaker is one of those who believe that certain economic prescriptions are, like natural phenomena, inescapable. So were all those years under house arrest sacrificed so that Myanmar could be handed over to the same agencies which have rendered the Philippine economy dysfunctional?

Yes, a rendezvous with disappointment appears likely.

(Feedback to: outsiders.view@yahoo.com)

Monday, April 23, 2012

Thunderbolts of greed

DIE HARD III
Herman Tiu Laurel
4/23/2012



The Filipino people as a whole have finally awakened to the electrocution they have been victim to by the Electric Power Industry Reform Act (Epira) passed and signed into law 10 years ago. It took the resistance of our brothers in Mindanao for the rest of the country to realize that a fight does exist between the commonweal and the interest of the oligarchy. For so long, the oligarchs have encroached on and taken over government to execute their extractions of profit and wealth at the expense of the people.

Luzon and the Visayas were first to be hit by the thunderbolts of greed. And perhaps because the shock and confusion at that time was still too novel, both succumbed to defeat. Mindanao, on the other hand, which enjoyed a decade-long exemption from the Epira, had ample time to witness the disastrous economic impact of that law and its deleterious effect on the lives of their brothers northward. And so it was when the oligarchs' final phase of privatization kicked in, Mindanao was already poised to fight back.

Among the many pivotal personalities who need to be commended in this crusade is Mr. Luis "Louie" Corral, who has been key to preparing the studies that many of Mindanao's political leaders are using to inform themselves and the public, as well as to prepare for their debates with the Department of Energy (DoE) on the power crisis and the Agus-Pulangi hydroelectric complex. These points — which would have been incontrovertible even by Epira's standards and those of high power price champion, Sen. Serge Osmeña — were all set to be presented to PeNoy at the Davao power summit two Fridays ago but were set aside because the chief executive opted to harangue the summit's 1,000 attendees with an irked lecture.

Perhaps because a few sensible people admonished him some time after that, BS Aquino III surprisingly had a change in tone. Last April 21, for instance, it was reported that he gave an order to "Review power rates," noting that the "…Hike in electricity charges in Visayas," in regard to the latest Energy Regulatory Commission (ERC) approvals of rate hike petitions, "may be unwarranted."

This announcement, of course, is a heretofore unheard of expression of interest, concern, and sympathy for the plight of power consumers from PeNoy, which we anti-Epira crusaders can only hope is a sign that a spark of realization of the very real and massive problem of power rates in this country has been triggered. We hope, too, that this is a sign that the power of the oligarchs' agents, such as Serge Osmeña and Dina Abad, is already on the wane. Maybe it is also PeNoy's realization of the political impact of his failure at the Davao summit, which could seriously damage his 2013 senatorial slate. Whatever it is, we hope BS Aquino III has now finally wised up because the nation will need his support to weather the worst of the electric storms to come.

Louie Corral has an excellent Power Point summation of the thunderbolts that will be hitting us if nothing is done to avert the damage that Epira has caused the 92 million Filipino consuming public. In the section, "The Coming Storm," we are alerted to: "Additional rate increases from Psalm (Power Sector Assets and Liabilities Management Corp.)'s P1 trillion stranded costs… as part of the 'Universal Charge'… (will) cost an additional P0.39 per kilowatt-hour (kWh); (the National Power Corp. or Napocor's Small Power Utility Group's) budget shortfall of P7 billion just for 2011… (will cost an) additional P0.07/kWh… (also for) the 'Universal Charge;' an additional SPUG budget shortfall of P3.1 billion (going to) the ERC's Incremental Currency Exchange Rate Adjustment (Icera) and Generation Rate Adjustment Mechanism (Gram)… will increase power rates for off-grid areas; the Napocor-Manila Electric Co. P14-billion Court of Appeals settlement may prompt Meralco to pass-through the amount of penalty to its consumers.

"Pending ERC petitions of Meralco, Davao Light and Power, Visayas Electric Co., and other distribution utilities (including 119 electric cooperatives); transition supply contracts between distribution corporations and/or Napocor and the privatized generating firms end(ing) in 2011 (that) are up for renewal… (noting that since) these generating companies are defined under the Epira as not being utilities, and therefore not subject to a 12-percent ceiling on (their rates of return)… the end result is that… generation charges will zoom up with their new contracts; transition supply contracts of independent power producers (IPP)… selling through an IPP Administrator (salesman or middleman) end(ing) in 2011… will bring up generation charges (with new IPP contracts); the proposed Renewable Energy program with its feed-in tariff would tie the country up to immature, unreliable and expensive power that would entail an additional P0.1256/kWh; the Supreme Court case on the illegal dismissal of Napocor workers that will net back wages of up to P48 billion…"

Louie adds: "Every one centavo per kWh increase represents P657,000,000 per annum (based on current demand of 7,300 megawatts); one centavo/kWh of power increase means 40 percent or P263,000,000 taken away, which should be food for the poor (based on lifeline rates); (while) 10 percent (of it) or P118,000 represents educational costs, medicine, transportation or house rentals."

There are many, many more alerts issued by Louie that we will have to include in our next columns. But there is an important one that we must highlight right now: The much-vaunted full "open access," which the DoE and ERC keep claiming will bring down rates, but which may instead cause rates to rise as large scale commercial/industrial consumers like giant malls and the like set up their own power plants, causing Meralco and its ilk to compensate for lost revenues by filing petitions for more rate hikes. At this point, only fools won't see that these are the unintended consequences of an ill-thought-out, greed-motivated, corruption-tainted privatization law.

(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., for constant updates on "The power thunderbolts to hit;" visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Saturday, April 21, 2012

The myth of privatization

BACKBENCHER
Rod P. Kapunan
4/21-22/2012



The privatization of the power industry, as the neo-liberals would articulate, marked the culmination of the private sector's partnership with the government. It was a partnership anchored on the validity of the capitalist system; that only the private sector, specifically the privatization of the power industry, could bring about the desired efficiency in power supply, reduce the cost of electricity, assure the public of continuous supply, create more industries, promote employment, and residually bring about prosperity to the nation through increased revenues.

Indeed, that was how the advocates simplified the theoretical consequence of privatization, insisting it could reach its maximum efficiency only under an era of complete deregulation. There was little room for doubt because, as they would say, the economy revolves wholly on common sense; that one can never stop the downstream flow of the river. As their high priest would often remind us, water will always seek its own level, but failing to draw the line that often, common sense seldom matches reality.

For that we swallowed hook, line and sinker that policy because the theory promised to delivery efficiency on the basis of an unregulated power industry. Nobody mentioned the system was at the outset bound to fail much that it was based on a defaulted economic proposition; that efficiency must always come in at a price but given a nomenclature called incentive. The maximization of efficiency was made synonymous to the maximization of profit

Given the present situation, unless we do something to put a stop to the madness of privatizing the power industry, we are bound to end up having an unimaginable power crisis that could unavoidably plunge the country into the abyss of economic "darkness" that could even trigger widespread unrest.

Thus, when the government let go the cascading demand to privatize and deregulate the power industry, no doubt gargantuan profit was no sooner realized. The spirited drive for efficiency by the owners, operators, and all those involved in the power industry emerged as new class of barons called "power industry barons."

More than that, government's patronage to their policy opened the Pandora's Box of the evils inherent in that system. They failed to foresee that deregulation and privatization were self-defeating propositions, for they will inevitably usher in cut-throat competition; result in the over-supply of energy more than the requirement by a given franchise area; and could result in price manipulation amplified by the pricing in the Wholesale Electricity Spot Market. All that has led to the unmitigated upward movement in the price of electricity.

Investment itself has been affected, with some even asking the government to pitch in. The symptoms are now written on the wall by the long hours of brownout, while the suffering public is conscious that power outage is being carried out with seeming impunity to pressure on the government to give in to their demands.

The worse thing about the present power crisis is that neither the producers of electricity nor the government, standing as wholly behind the policy, does not have the capacity and the political will to reduce the cost of electricity. The whole issue now revolves around the urgency to promote efficiency while allowing the producers of electricity to continue to rake in their huge profit. They stick to their old formula by insisting in privatizing the remaining state-owned power plants because they are in fact against any form of competition. They already commingled and irreversibly integrated their high cost of production that to unbundle them now is to wreck the intricate system that generated huge profit in the name of efficiency.

They would rather allow the people to bear the cost and suffer than to reduce the cost of electricity which they cannot do because of our inflation-based economy. That becomes a serious problem because the malaise is affecting the cost of investment. The negative effect of glut in the supply of power is seriously jeopardizing the cost to produce per kilowatt hour that is debilitating to many of the country's downstream industry, notwithstanding that many of them survive on a marginal profit basis.

This explains why the advocates of privatization and deregulation are running out of logic; it now taps the government as their own counsel – that the final solution to the problem is the elimination of inter-industry competition represented by the competition put up by the remaining state-owned generation plants operated by the National Power Corporation.

They want state-owned power plants to be finally eased out despite the truth that none of their promises was fulfilled, and on the contrary the country today stands as the highest in terms of cost in electricity. Because the public have become suspicious, they tapped the government of President Aquino to join them in blackmailing the consumers. As Mr. Aquino ignorantly stressed, the consumers should learn how to pay the cost, forgetting that just like the producers of electricity they too suffer from losses by the inability to pay.

Friday, April 20, 2012

‘Mindanao Action Party’: A political jihad

DIE HARD III
Herman Tiu Laurel
4/20/2012



The final insult to our Mindanaoan brothers and sisters who have politely raised their appeal the past few months to the national political authorities for action on the Mindanao power crisis came via the cancellation of the April 19, 2012 meet by the Joint Congressional Power Commission (JCPC), the body tasked to oversee the implementation of the power privatization law known as the Electric Power Industry Reform Act (Epira).

The cancellation, according to its chairman, Sen. Serge Osmeña, was due to the absence of his co-chairman, Rep. Henedina Abad, as well as those of other members who could not confirm their attendance. Given these characters’ track record, the past 10 years of sitting on urgent issues in their respective energy committees, “postponement” is likely a deliberate delay in furtherance of their covert pressure tactics.

While Osmeña takes his easy time, the JCPC is keeping roughly 30 million Mindanaoans waiting in darkness. This is clearly the reason for some Mindanaoans to now take matters into their own hands.

Early Wednesday morning we got an urgent call from veteran political warrior Homobono Adaza. In the midst of handling countless legal cases, from the power plunder and the Corona impeachment to several political-legal-economic issues in tandem with lawyer Alan Paguia, Adaza has decided to spring into action in response to the blatant imperialism of Manila’s elite politicians against the people of Mindanao.

The power summit in Davao where approximately a thousand people from all over Mindanao attended, hoping to have a dialog with BS Aquino III, instead became a forum where they were treated to an imperial dressing down and ordered to “pay up or face blackouts,” and told further to accept the privatization of Mindanao’s “crown jewel,” the Agus-Pulangi hydroelectric system.

Then, as if to rub salt on an open wound, Mindanaoans were made to expect some dialog later in the JCPC, only to be so rudely cancelled until the next whim of the man who calls them “spoiled” brats.

Apparently, the evening before, Adaza was already in consultation with numerous Mindanao citizens and political leaders where a consensus was reached that Mindanao should organize again — as it did during the long Marcos period — a political party of its own to redress the grievous shortchanging it has been getting from Manila’s “elite imperialists.” Adaza certainly has had experience on this as he was one of the major organizers of the victorious Mindanao Alliance in the 1970s that catapulted him, Reuben Canoy, and Nene Pimentel to national prominence.

Adaza’s brief on Mindanao’s current predicament reads like an oft-repeated wish list: First, Mindanao has not had sufficient representation in the seat of national political policy, the Senate; second, the Epira issue needs strong Mindanao representation that will not only “appeal” but take decisive political action to repair the damage that has been done; third, as a counter-measure, Mindanao should win a fair share of the Senate seats, at least four of 12, up for grabs in 2013.

The call of Adaza for the “Mindanao Action Party” (MAP) will ring loud and clear to all Mindanaoans; thus, Luzon and the Visayas must support this for their own sake.

We have seen the fighting spirit of our Mindanao brothers, unspoiled by Manila’s politics and pampering which the regional and provincial politicians in the political center have fallen for. Though we don’t know yet if Adaza himself will be a MAP candidate, we hope that more like him from Mindanao will pick up the mantle of being the people’s champion in the coming senatorial elections to show these corrupted national leaders what it means to fight for the people’s cause.

The fundamental strategy I surmise is to consolidate Mindanao’s votes which would be around 11 million today, enough to put MAP’s candidates into the last four slots of the Senate. In 2010, the 12th, and tail-ender TG Guingona, who now sits as a Lopez backstop next to Osmeña, got 9.6 million votes.

Mindanao’s fight now is a national fight, which Mindanao has actually carried on where Luzon and the Visayas found themselves exhausted after 10 years of protesting the Epira. Mindanao is also the final frontier for the foreign and local power oligarchs to subdue, just as it was when the Spaniards and Americans tried to pacify the whole country for their colonial domination but were stopped in Mindanao.

The power oligarchs, through the mouth of Serge Osmeña, are saying they want to raise the power rates in Mindanao to the level of Cagayan de Oro of P7.50 per kilowatt-hour (kWh) at this time, which is $0.18 per kWh and higher than even Hong Kong’s $0.14 per kWh. Even if that rate were lower than Manila’s or the national average of $0.23 per kWh today, the aim of the oligarchs is to eventually even all this out to the Manila and national average. These have all been stated in so many words by Energy Secretary Rene Almendras and Serge Osmeña; and with the lopsided Performance Based Regulation (PBR) scheme, rates will definitely go up every three years.

The Mindanao and national struggle to restore truthful, just, and fair electricity rates in generation, transmission, and distribution, as well as the sector’s ownership structure and laws, epitomize everything that has gone wrong with the country under the present “plutonomy,” an economy controlled by plutocrats who also control the present crop of political players ushered in by Edsa I and II’s Yellow mobs. It’s time for a national political “jihad,” a holy war of the people, against these plutocrats and corrupt politicians.

(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN’s HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on “Electricity and fuel price crisis: Solutions” with consumer advocate Dr. Amanda Cruz and Wilson Fortaleza of FDC; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Surviving the Titanic and the North Korean Rocket

YESTERDAY, TODAY & TOMORROW
Linggoy Alcuaz
4/16-22/2012



For the past few weeks we have had a crescendo of panic and over acting over the North Korean rocket launch. While North Korea claimed that they were just launching a satellite, the United States and its allies were suspecting and accusing North Korea of developing an offensive ballistic missile.

In trying to avoid South Korean and Japanese airspace, the track of the rocket would pass over the East Philippine Sea close to the Eastern side of Luzon. Actually thousands of satellites, rockets and pieces of space debris are constantly orbiting around the earth all the time.

However, these are already orbiting and not yet falling down to earth. However, in order to send something into orbit at the present level of technology, a series of rocket boosters that detach and fall back to earth are employed. It was the third stage that was supposed to fall east of the Philippine island of Luzon.

However, the North Korean rocket malfunctioned soon after launch and did not get anywhere close to us. The hullabaloo and panic caused more harm to our wellbeing than the rocket that we feared. It was during the over acting in anticipation of the rocket launch that I recalled the natural and man-made disasters that we had not properly prepared for. Some of these had caused so much loss of life.

One glaring example was the collision and sinking of Sulpicio Lines’ Dona Paz and an oil tanker between Batangas, Romblon and Mindoro in December 1987. I was the Commissioner of the National Telecommunications Commission at that time. We monitored the compliance by civilian aircraft and ships of laws and regulations pertaining to radio communications and safety.

One of the important regulations then was that ships at sea should monitor the emergency frequency every other fifteen minutes. However, on an overnight trip to Cebu City from Manila, I could not raise any response on the standard Maritime emergency frequency. When I simulated an Emergency Call on board an aircraft over the Visayas, I got a response from a Quantas plane but none from any Filipino aircraft.

When the Titanic was sinking in the freezing North Atlantic, the radio operator of the nearest ship, the Californian had turned off his radio and had gone to sleep. The next nearest ship was the Carpathia but it took her almost till morning to get to the survivors in the lifeboats. In the freezing waters, a person would die from hypothermia in minutes,

Yesterday was the one hundredth anniversary of the sinking of the RMS Titanic. The Titanic was the biggest and newest passenger liner in the world. She was owned by the White Star Line (the competitor of the Cunard Line. Both were British.). She was the middle ship in a class of three: the Olympic, Titanic and Britannic. She was built by Harland and Wolf in the City of Belfast in the Island of Ireland which was part of the United Kingdom.

She was on her maiden voyage and had just been completed. On April 10, 1912, she left Southampton for Cherbourg in France, Queenstown in Ireland and New York. Just before midnight on April 14, 2012, she hit an iceberg south of Newfoundland. She sank in two hours and forty minutes. She only had twenty lifeboats. They could only carry 1,178 passengers and crew out of 2,224 on board. Following is an account from Wikipedia:

“At 11.40 pm (ship's time), lookout Frederick Fleet spotted an iceberg immediately ahead of Titanic and alerted the bridge. First Officer William Murdoch ordered the ship to be steered around the obstacle and the engines to be put in reverse, but it was too late; the starboard side of Titanic struck the iceberg, creating a series of holes below the waterline. Five of the ship's watertight compartments were breached. It soon became clear that the ship was doomed, as she could not survive more than four compartments being flooded. Titanic began sinking bow-first, with water spilling from compartment to compartment as her angle in the water became steeper.

“Those aboard Titanic were ill-prepared for such an emergency. The ship's lifeboats only had enough space to carry about half of those on board; if the ship had carried its full complement, only about a third could have been accommodated in the lifeboats. The crew had not been trained adequately in carrying out an evacuation. The officers did not know how many they could safely put aboard the lifeboats and launched many of them barely half-full. Third-class passengers were largely left to fend for themselves, causing many of them to become trapped below decks as the ship filled with water. A "women and children first" protocol was generally followed for the loading of the lifeboats and most of the male passengers and crew were left aboard.

“Two hours and forty minutes after Titanic struck the iceberg, her rate of sinking suddenly increased as her forward deck dipped underwater and the sea poured in through open hatches and grates. As her unsupported stern rose out of the water, exposing the propellers, the ship split apart between the third and fourth funnels due to the immense strain on the keel. The stern remained afloat for a few minutes longer, rising to a nearly vertical angle with hundreds of people still clinging to it. At 2.20 am, it sank, breaking loose from the bow section. The remaining passengers and crew were plunged into lethally cold water with a temperature of only 28 °F (−2 °C). Almost all of those in the water died of hypothermia or cardiac arrest within minutes or drowned. Only 13 of them were helped into the lifeboats though these had room for almost 500 more occupants.

“Distress signals were sent by wireless, rockets and lamp, but none of the ships that responded were near enough to reach her before she sank. A nearby ship, the Californian, which was the last to have been in contact with her before the collision, saw her flares but failed to assist. Around 4 am, RMS Carpathia arrived on the scene in response to Titanic's earlier distress calls. 710 people survived the disaster and were conveyed by Carpathia to New York, Titanic's original destination, while 1,517 people lost their lives.”

Subsidy for power oligarchs

CONSUMERS' DEMAND!
Herman Tiu Laurel
4/16-22/2012



The Mindanao power crisis has now raged on for months; yet the BS Aquino III government at first refused to act upon the request of Mindanao power consumers and electric cooperatives (EC) to deploy four existing emergency power barges lying idle at several sites. One of these was in Davao, two in the Visayas, and one in Navotas. The Department of Energy (DoE) said it was still waiting to privatize these before they could be used to help Mindanao, with the bidding schedule set in late April.

So what was Malacañang really after throughout this period of procrastination? Was it to give Mindanao’s power consumers no choice but to swallow the “bitter pill,” i.e. the exorbitant power price offered by Therma Marine Inc. (TMI) of the Aboitizes from two power barges it obtained from Napocor at $30 million, later turned around and revalued at $80 million to make it the basis for new power rates? Was it also to give TMI the wherewithal to demand a contract period that ranges from three to five or up to 20 years, with the rate base escalated along with the reappraisal to current replacement cost of the power barges?

Mindanao consumers and ECs have understandably refused to purchase the high priced power of the Aboitizes. This e-mail we received last week from Mr. Jojo Borja, a major stockholder of Iligan Light and Power Inc. (ILPI), highlights the brick wall the BSA III government and the Aboitizes ran into when trying to force Mindanaoans into swallowing such exorbitant electricity prices:

Mentong,

According to Barangay Capt. Mateo Cortez who is also Vice President of Normic, they just had a public hearing that was attended by Napocor and NGCP. PSALM did not attend. You may call him and check out the actual status of the cooperatives in Mindanao. They are members of the 33 Rural Cooperatives of Mindanao who instead opted for darkness as they refused to be blackmailed by Therma Marine into signing very expensive long term POWER SALES AGREEMENTS (PSA). With the recent “orders“ of Almendras that they must buy (power from TMI)… they agree(d) but only for one year to give PSALM enough time to repair the four power barges. If Aboitiz will insist on a five-year take-or-pay contract… the cooperatives will rather choose the rolling brownouts.

In the case of Iligan City, ERC (Energy Regulatory Commission) ALREADY APPROVED the PSA between Mapalad Energy Generation Corp. and Iligan Light and Power. ERC, in spite of this representation’s (appeals) to it that the consumers of ILPI own a 104-MW (plant) AND THAT ILPI SHOULD NOT BUY 2 units of 7.5-MW inefficient, obsolete diesel power generation plants at P400 million. (But still, the) ERC RAILROADED THE APPROVAL OF AN ADDITIONAL GENERATION COST of P2.23 per kWh for the next 20 years… a rate that will increase after the first year for cost overruns (similar to what TMI did) and every three years thereafter as the value of the obsolete power plants will be reappraised as… allowed by EPIRA.

Jojo

The first part of the e-mail is self-explanatory, but what is striking is Normic’s decision preferring the “rolling brownouts” to paying 50% additional to the Aboitiz’ Group’s TMI which will provide the electricity from two power barges it “bought” from Napocor-PSALM and reappraised from $30 million to $80 million to hike the rate base for its electricity supply, in order to sells its power at P11/kWh compared to the normal P2.60/kWh in Mindanao.

The second part of the e-mail highlights the distorted and corrupt consequences of EPIRA (Electric Power Industry Reform Act)--in this case, Iligan City, which acquired the 104-MW BOT power plant transferred from the Alcantaras’ IPP to Napocor and then to the city for non-payment of real estate taxes.

Iligan City had, in fact, wanted to operate the plant for the crisis; but the ERC refused to give it provisional authority and instead approved new capacity at a higher additional cost imposed for the next 20 years.

BSA III started feeling the heat as the public began to understand the issues and see the oppressive and exploitative attempts of government and the oligarchs to blackmail the people of Mindanao on the power issue. Malacañang and the DoE did finally find a solution, announced in the newspapers and summarized in this headline in the Bulletin: “Mindanao Subsidy to Reach P5-B,” based on number-crunching made by the Power Sector Assets and Liabilities Management Corp. (PSALM) and Napocor, to cover the months of April, May and June this year with power bought by government from TMI, at a price that the private company wants, with the report stating, “The calculation was in reference to the P0.50 per kilowatt-hour (kWh) average hike in Mindanao blended rates if the power barges and other thermal facilities will be aligned as stop-gap measure to their electricity woes.”

The blended rates are the mix of the high power price from Aboitiz with the nearly free cost of power from the Agus-Pulangi hydroelectric system, among others.

BS Aquino, the reports say, will be in Mindanao for the touted Power Industry Summit--purportedly to explore the most immediate and feasible solutions to the grid’s power supply crisis. But from the looks of it, his solution is to subsidize the high profit of the Aboitizes and not the demands of Mindanao power consumers for a fair power rate.

BSA III is extracting from the people’s resources--taxes to be precise--to fund the high power rates of the Aboitizes. The Joint Congressional Power Committee co-chair and Senate committee on energy chairman, Sergio Osmena III, is reported to be averse to the idea of the government extending subsidies just so the power rates in Mindanao could be kept artificially low. He says the government cannot forever submit to consumers’ bid for subsidies while he sheds crocodile tears for the poor alleging that such subsidies take their toll on budget for social services. Of course, we should inform Osmeña that it is his ilk being subsidized and the “lifeline rate” subsidy for the poor are actually charged to paying customers of Meralco and all other paying power consumers.

Other oligarchs are jumping on the bandwagon of the Mindanao power crisis: For some time now, the heir of the Cojuangco political throne, Rep. Mark Cojuangco, has been promoting aggressively the revival of the Bataan Nuclear Power Plant (BNPP), which the Fukushima nuclear tragedy put a hold on. Now he and his group are reviving it, using the Midnanao power crisis as an opportunity.

Major national dailies have already headlined this, “Mindanao may go nuke… Region willing to host Bataan power plant or build new one” by Christine F. Herrera of the Manila Standard; but I wonder when such a consultation was ever made. It did quote one businessman and a so-called Agham party-list man Angelo Palmones, who were quick to see the money opportunity. But what they don’t seem to understand is that the BNPP uranium reaction nuke power is already “so last century.” There is now a new and 10,000 times safer nuke energy source, Thorium, which the new nuke powers, China and India, are treading.

Cojuangco reportedly wants a new plant for Mindanao which some reports peg at $10 billion, but that would just be an excuse for the Western nuke power companies to dump the perilous uranium reactor technology and uranium stockpiles on the Philippines.

One late but still welcome development in the national debate on power privatization comes from Rep. Erin Tañada who, as per this report, “Napocor privatization a mistake, says lawmaker,” wants government to return to power generation as solution to Mindanao shortage” in a report by Gil Cabacungan. But, of course, what is right for Mindanao is right for the rest of the country, and we hope more and more ordinary citizens like readers of OpinYon take up the challenge to compel our legislators to free the country from the clutches of oligarchs and demand the EPIRA to be junked, and form a new paradigm of public ownership through such means a cooperativization or consumer ownership of the power sector and distribution utilities.

(Tune in to 1098AM, DWAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN’s HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on “Fuel and power solutions” with Dr. Amanda Cruz and FDC; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Monday, April 16, 2012

BSA III: ‘My government, inept!’

DIE HARD III
Herman Tiu Laurel
4/16/2012



At the much-ballyhooed power summit convened by the Aquino III government in Davao last week, the clamor of Mindanao's leaders and people's organizations was brilliantly echoed in the voice of Menchie Ambalong of the Mindanao Commission on Women who, as reported, reasoned that government's alleged inefficiency "should not be an issue because Agus-Pulangi earn(s) P7 billion a year," eliciting immense applause from the summit's 350 delegates.

In contrast, the audience turned silent when BS Aquino III, the supposed president of the republic, spoke and insisted that government was inefficient in the operation of the plants, saying, "We know for a fact that the government is inefficient in operating the Agus-Pulangi and other assets and the debts that resulted from that inefficiency were even bigger than the national budget…"

Supporting Ambalong's view, the president of the Confederation of Provincial Governors, City Mayors and Municipal Mayors League, Davao del Norte Gov. Rodolfo del Rosario, for his part, said, "In Mindanao cheap hydropower is the only incentive that could attract investors and drive commerce and development… Let's shatter the myth that the Napocor (National Power Corp.) and the Agus-Pulangi complex are all losing propositions," adding that the state-owned power company earned P73.2 billion at P2 per kilowatt-hour (kWh) from 2003 to 2011.

That's really telling President Noynoy Aquino that he's either an idiot — for being oblivious to the fact that Agus-Pulangi is a huge earner — or that he's simply parroting a deliberate lie of the power pirates and privateers to deceive the people. Besides, if PeNoy's finger were to persist in pointing to government as inefficient, he might soon be surprised to see where his thumb is actually aimed at.

In a presidential republic, a president is both chief executive and head of state, representing therefore the entirety of government. This is a universal understanding. As Wikipedia puts it, "In presidential republics the head of government may be the same person as the head of state who is often called… a president…"

Now, if President BS Aquino III says the government has been inefficient in Agus-Pulangi's operations, isn't he actually saying that he himself was (and is) inefficient as head of the very government in charge of everything in the country since his proclamation in June of 2010? And given that he seems to show a great disdain for "inefficiency," castigating "government" for being inefficient, can he apply that standard to himself as head of government?

Such inanity was what BS Aquino III made the 350 delegates suffer while they wriggled in their seats with a great deal of difficulty out of holding back their rage.

Jojo Borja, this column's man-on-the-scene at the summit, called us afterward, admitting that he held back and spoke only very briefly on the floor, fearing that he may spill his raging gut and give BSA III a tongue-lashing for the incredibly twisted perspective the head of government displayed.

BSA III had such incongruent statements on Agus-Pulangi that he actually asked Mindanaoans: "You insist on operating it? So who would spend for the rehabilitation?"

The Agus-Pulangi rehabilitation that would restore the complex to full capacity was estimated by Napocor to cost anywhere between P2 to P3 billion. Is PeNoy saying that a head of government with a P1.816 trillion national budget for 2012 cannot find a relatively paltry amount to avoid the losses that are 20 to 30 times greater?

As we can see in this Mindanao Gold Star Daily report on the impact of the crisis, "Estimated economic losses using the ratio of Gross National Product (GNP) to the total kWh sold (P144 per kWh in 2010 multiplied by the 430 million unserved kWh in 2010) translates to P62 billion in economic losses for Mindanao. In Cagayan de Oro and the towns of Tagoloan, Villanueva, and Jasaan in Misamis Oriental, the reported total unserved energy of 15.6 million kWh translates to some P2.2 billion in economic losses. Hardest hit during the 2010 crisis were member companies of the Cagayan de Oro Chamber of Industries (Coci) with some suffering as much as a 50-percent drop in production due to the power curtailment. "

As there is yet no current estimate on how much Mindanao's economy has bled from this continuing crisis, the above report lays a clear basis for believing the losses until May this year will reach P62 billion or likely even more.

But, as BSA III remains undeterred, he even found the gumption to lecture Mindanaoans "to pay a real price for a real service," stressing that they are left with "only two choices: pay a little more for energy or live with the (rolling blackouts)."

Considering that even if the "blended" generation rate (a cost mix of the nearly cost free hydroelectric power and the up to P14/kWh rate of independent power producers or IPPs), when added to the distribution cost, would approximate Cagayan de Oro's rates today of around P7.50/kWh (the price preferred by Sen. Serge Osmeña and the Energy Department), that would still be $0.18/kWh — higher than Hong Kong's $0.14/kWh, Kuala Lumpur's $0.11/kWh, Shenzhen and Jakarta's $0.10/kWh, or Shanghai and New Delhi's $0.09/kWh. Comparing such figures from Jetro (Japan External Trade Organization) where the Philippines' nationwide average price already tops the list at $0.23/kWh, that ranking will shoot up even more once Mindanao accepts PeNoy's higher rates.

And so we ask: In the face of such burdens, are Filipinos (whether from Luzon, Visayas, or perhaps Mindanao soon) who are being made to pay the highest power rates in Asia, still the ones whom Serge Osmeña brands as "going to be in trouble because (they've) been spoiled?" What the hell!

Perhaps the ultimate question ought to be: Why are PeNoy and Serge spoiling the power oligarchs? And, since the Palace occupant hates the "inefficient" government so much, may we also ask: Why are you still there?

(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on "Fuel price crisis: Solutions" with consumer advocate Dr. Amanda Cruz and Wilson Fortaleza of FDC; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Saturday, April 14, 2012

Ridiculously over-reactive

BACKBENCHER
Rod P. Kapunan
4/14-15/2012



The Democratic People Republic of Korea or North Korea has finally launched its Unha-3 rocket. The liquid-fueled three-stage rocket, in the category of intercontinental ballistic missile (ICBM), was launched possibly to coincide with the 100th birthday of the founder of the DPRK, the late Kim Il Sung. According to Paek Chang Ho, the chief of the launch command center, the Unha-3 rocket will hurtle into orbit Kwangmyongsong-3 earth observation satellite from its Sohae Satellite Station at Tongcahng-ru located in North Korea's forested northwest area.

In responding to the anxiety of the US and some of its more ridiculous surrogate states like the Philippines, Chang Ho said, "the launching of the rocket together with its weather satellite is anything but a peaceful civilian bid to send a satellite into space." He added, "the satellite would send back images and data used for weather forecasts and agricultural surveys."

Pyongyang laughed off accusations that the launch is in preparation to its development of a missile that could carry a nuclear warhead. Ryu Kum Chol, vice director of the space development department of the Korean Central Space Committee said: "The launching is a sovereign right. The weight of our satellite is 100 kg. If it was a weapon, a 100 kg payload wouldn't have much of an effect … our launching tower is built on an open site."

Despite the assurance, the US has taken a more belligerent stand to pressure North Korea into canceling the scheduled launch. On the contrary, North Korea provided the International Maritime Organization a "launch window" or the path the rocket will pass as it soars into space.

Debris that could have fallen here, if any, would have been bits of small materials. This is why our clownish over- reaction has made us most ridiculous. In all these years, the US and the then-Soviet Union were locked in a space competition, now continued by Russia, and by a newcomer, China, the Philippines has never bothered about those wayward space junks that fall back to earth.

In fact, the possibility of a Filipino being hit by falling space garbage is one in a million. Nonetheless, droll states like South Korea and the Philippines exhibited unprecedented preparedness as though a meteor that could wipe out mankind is about to hit earth. They have re-routed flight paths to avoid the rocket's path. Korean Airlines, Cebu Pacific and Philippine Airlines have to change their flight path, something they never did before despite the fact that many satellites uncontrollably tumble back to earth causing little or no damage to anybody.

What is causing curiosity in the international community is the furious efforts of the US to prevent that country from launching its own rocket. According to US Secretary of State, Hillary Clinton, "the launch would be a direct threat to regional security." That makes everybody wonder.

The treaty on Principles Governing Activities of States in the Exploration and Use of Outer Space do not impose any prohibition against any state, whether or not signatory to the treaty, from launching into outer space satellites for peaceful purposes. That position is based on the universally accepted principle that nobody owns the outer space or res nullius, nor can one appropriate that exclusively to the exclusion of the others.

It is from this standpoint why North Korea and the rest of the members of the international community ask what provocative step it committed, when it is merely exercising its right as a sovereign state to participate in the peaceful exploration of the outer space, using its own technology for the good of mankind?

On the contrary, the US has prejudged North Korea's rocket launch by claiming the project is tied up to its nuclear weapons program. Maybe that is plausible, but is there a law punishing states for an anticipated violation of an international treaty? The US ambassador to the UN even threatened to bring the matter to the Security Council to explore the possibility of legalizing an invasion of that hermitical state.

What is prohibited in the treaty that has been ratified by 90 states since it was opened for adhesion on January 27, 1967 is the placing of weapons of mass destruction, such as nuclear weapons, in space, in the moon or celestial bodies.

Because of North Korea's determination to exercise its right, the US has threatened to cut off its food aid program it signed last February on condition it freeze its nuclear weapons program and agrees to a missile test moratorium. But the condition it imposed is a blackmail only gangster states do. The evil motive becomes obvious that it wants to impose a monopoly on the use of the outer space.

The gambit is illegal because it imposes limitations on other states which it cannot without violating international law. If the US has allowed other countries like Russia, China, India and even the criminal Zionist state of Israel to carry out their own space programs, it is because of realpolitik that is no way it could prevent them without risking war.

(rodkap@yahoo.com.ph)

Power shock

Herman Tiu Laurel
4/9-15/2012



Like a series of bombs as in carpet bombing, determined to obliterate the enemy, the national leaders of the Philippines sent a wave of thunderbolts that stunned the nation to disbelief.

Price increases in oil, LPG and electricity broke records that could only come from heartless government officials.

Amid claims of major economic gains by President Benigno S. Aquino III, manufacturing companies in the Philippines are packing up to move to countries like Vietnam, China, Thailand and other Asian countries where cost and laws are friendly to investors and government corruption is tolerable.

In the first quarter of 2012 the country was immediately hit with the shock of two LPG price increases totaling thirty percent, oil prices spiraled up seven times and just as the quarter ended the Energy Regulatory Commission (ERC) approved an increase for Napocor's electricity generation rate to be implemented starting April and seen in the consumers' power bills by May.

The rate increase amounts to P0.6904 per kilowatt-hour (kWh) for Luzon, P0.6060/kWh for the Visayas and P0.0442/kWh for Mindanao and valid for "eight to 10 years" according to the ERC "which was the length of time we used in the calculation of the GRAM (Generation Rate Adjustment Mechanism) and ICERA (Incremental Currency Exchange Rate Adjustment), according to ERC Executive Director Francis Saturnino C. Juan.

The variance in the duration of the effectivity of the charges as well as the rising value of the Peso relative to the ICERA has raised many questions, but despite these the ERC has put in its final approval.

The public has reacted to the news of the new power rate increase with consternation as reflected in the media in the days following its announcement. A JETRO (Japan External Trade Organization) Asia power rate survey was cited by media and passed on by the public by SMS text messages summing up the report:

Manila at $ 0.23 per kWh; Tokyo and Singapore at $0.20 per kWh; Sydney (Australia) and Cebu (Philippines) at $0.19 per kWh; Colombo (Sri Lanka) at $0.18 per kWh; Mumbai (India) at $0.16 per kWh; Phnom Penh at $0.15 per kWh; HongKong at $0.14 per kWh; Auckland (New Zealand) and Taipei (Taiwan) at $0.12 per kWh; Kuala Lumpur (Malaysia) and Karachi at $0.11 per kWh; Shenzhen (China) and Chennai (India) at $0.10 per kWh; and Jakarta (Indonesia); Shanghai and Guangzhou (China) and New Delhi (India) at $0.09 per kWh.

While already shocking every Filipino power consumer to learn that the Philippines' power rates are already the highest in Asia, what the not generally known yet is that the new power rate increase is just the tip of the iceberg of the shock that is yet to come for them.

The PSALM (Power Sector Asset Liabilities Management), the agency EPIRA (Electric Power Industry Reform Act) created to manage the privatization of all Napocor asssets, has been applying with the ERC for rate increases under the UC (Universal Charge) which will pay for Napocor's "stranded costs" and stranded debts".

"Stranded contract costs" refer to "the excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of such contracts in the market". Simply put, these are debts primarily from IPP contracts for power that was never utilized and what the PPA (Power Purchase Adjustment) was supposed to pay for a decade ago.

Fidel V. Ramos wanted a high PPA imposed but then President Gloria Arroyo decided to ease the rate to spare consumers the full brunt of the onerous debts while Congress sought various alternatives such as issuance of bonds to reduce the PPA. Cory Aquino signed 15 IPPs while Ramos signed 48 and Arroyo 1.

In 2002 the stranded contract cost already amounted to $ 7.4-Billion¹. This belies the impression Sen. Serge Osmeña gives in his statements that Napocor had always been bleeding, a 1989 study cited by economic think tank Ibon Foundation reported Napocor debts stood only at $ 795-million.

"Stranded debts" refer to "any unpaid financial obligations of NPC which have not been liquidated by the proceeds from the sales and privatization of the firm's assets" which includes fuel NPC buys for IPPs, but its full meaning is not settled. A report by Myrna M. Velasco of the Manila Bulletin last March 26 states that "ERC casts 'broad' definition of stranded debts in PSALM costs".

Last year, PSALM sought to recover P471-billion "stranded debts "under the universal charge (UC) component of the electric bills, these definitions haven't been clarified. The power sector debts stand at P 1-Trillion today. PSALM has applied to recover P 140-Billion in "stranded costs" under the UC which amounts to P 0.39/kWh over 15 years.

If all the P 1-Trillion were to be charged it could add almost P 3.00/kWh over the next fifteen years to the already highest power cost in Asia. To hide these costs Congress and PSALM are seeking ways to absorb this into the National Budget and, therefore, still the taxpayers' account.

Electricity is a fundamental requirement in modernization of society and its economy. It is a truism that a modern society should see a growing manufacturing sector relative to its agricultural and service sectors.

If we look at the share of manufacturing to total output from 1998 at 24.5 percent to 23.7 percent in 2005 and 22.2 percent in 2010 and 17.1 percent in 2011, we can see the connection of the rate of electricity price rise as a major factor.

In terms of employment the manufacturing sector share has declined from 10.4 percent of employed workers to 9.5 percent in 2005 and down to 8.1 percent in January 2011.

These jobs losses are huge, and according to economist Ben Diokno several times over the number of jobs created in the business process outsourcing industry.

While many factors contribute to the decline of the manufacturing sector the high cost of power is undoubtedly one of the major reasons, which has compelled the Philippine Chamber of Commerce and Industry (PCCI) and TUCP (labor) and their affiliate organizations to speak on this with uncharacteristic loudness.

While Metro-Manila was coping with the latest power rate hike petition Mindanao had been in arms for the whole quarter, over the twelve-hour long blackouts causing billions of losses.

As the Midanao voices reached the national media, with Governor Emilou Talino-Mendoza of North Cotabato in chorus with Mayor Darlene Antonino-Custodio of GenSan, and Mindanao Development Authority chair Lualhati Antonino declaring the crisis there as "intentional" and "artificial shortage" the bigwigs in Manila were forced to start explaining.

The response of Sen. Serge Osmeña as chair of the Senate committee on Energy can be summed up in a question-and-answer with the press last March 28 in the Senate, "Q: So what's the solution? For them to pay the higher rate na lang?; Serge: Yes. Because the most expensive power, sabi nga, is no power. If you have no power, you have no business, if you have no business, you have no job. That's the most expensive power."

By Serge Osmeña's comment any price, no matter how high, is acceptable so long as supply is there.

If that logic works then why are industries leaving the country for places where power rates are half of the Philippines, like China, Vietnam, Indonesia.

Osmeña's logic favors only the handful of power oligarchs. Seemingly in response, PCCI President Miguel Varela said: "As strategically and correctly planned years before, lower power cost was the key driver in making businesses locate and thrive in Mindanao and would be the a strong platform in achieving peace in the area."

The Mindanao ECs have refused to bite the high priced long term power contracts to solve the short term "intentional" and "artificial shortage" that's actually due to ten years of deliberate non-dredging of the hydroelectric powers reservoirs of Mindanao by the Dept. of Energy authorities appointed in behalf of the oligarchs and clearly protected by politicians like Serge Osmeña who's said DoE secretary Rene Almendras is "doing a good job" despite failing to dredge Agus-Pulangi the past two years which easily could add 50 MW of power costing less than 1 centavo per kilowatt to produce.

A web of darkness now seemingly traps an entire nation, condemning it to generations of economically and socially debilitating high power rates.

That web is the EPIRA, Electric Power Industry reform Act, prohibiting government's role in the power sector and transferring to corporatists hands all its power generating, transmission and distribution assets, including those god-given natural resources such as hydro and geothermal.

It creates a quasi-judicial regulatory body in the ERC designed to be a State in itself, beyond the reach of the Law itself and the Supreme Court (SC) which in 2004 was discovered as the ERC defied it in formulating the PBR (Performance Based Rate) raising allowable power utility profit up to 17% of the rate base over the 12% RORB (Return-On-Rate-Base) formula the SC had judged just and fair.

The ERC changes its various financial formulations practically without public consultations, like the GRAM and ICERA, and imposes them without ensuring public appreciation.

The EPIRA was forced through a lame duck Congress in 2001 after the fall of President J. E. Estrada who opposed "sovereign guarantees" that IPP contracts require to be viable for securitization.

EPIRA was facilitated by IMF $ 900-M power sector and $ 300-ADB rehabilitation loans dangled before the Arroyo government and P 500,000.00 per congressman supposedly distributed by then Speaker Sonny Belmonte, plus P 10-M "O Ilaw" project from the NEA.

Such is the modus operandi of the Western powers using corrupt local political classes, according to the 2004 "Confessions of An Economic Hit Man" by a former U.S. financial expert consultant, John Perkins, and no means was off the table to entrap a Third World country into the web of debt, not even assassination.

The objectives of the hegemonic power: 1) massive profits for its financial institutions from the securitization of projects; 2) in conspiracy with local oligarchs, the takeover massive government assets for a song; 3) financial subjugation and deconstruction of a nation's economic modernization and, hence political, sovereignty.

The public wants solutions, and not the type that Osmeña or Malacañang offered to just accept high power rates just to ensure supply.

The Freedom from Debt Coaliton (FDC) has demanded a review and negotiation of all the IPP contracts beginning with an audit of their books to verify what really are legitimate debts and lower the stranded costs.

It hearings on the IPPs it has been learned that they supply electricity at a much higher price than Napocor, the average cost of electricity supplied by IPPs is about P20 per kilowatt-hour while other producers only charge P3 per kWh, according to energy officials themselves. Batangas Rep.

Hermilando Mandanas, a former investment banker, said the IPPs already recouped their investments, and now make billions of pesos in profits since the Ramos administration.

 There have been calls for the re-nationalization of the power sector and the stranded debts amortized with the profits from its operations, i.e. just restoring the surplus back to the public. As the Philippine media has headlined, "Power crisis: No time for Noynoying".

Friday, April 13, 2012

Laughing imperialists

DIE HARD III
Herman Tiu Laurel
4/13/2012



The Mandarins in Washington must be laughing their bellies out.  How clever they must think of themselves in making half the world scamper around for cover while they screamed, "The sky is falling."
 
Indeed, the US ordered its minion-states to perpetuate the fable of a North Korean (NoKor) "missile" test.  It even poked its surrogate to threaten the shooting down of said rocket "if it threatens any part of Japan."
 
While ordinary folks do not have the means to judge if that is even possible, not having the maps nor the trajectory the NoKor leadership announced, others would see that the trajectory flies south, away from Japan, and toward the seas east of Taiwan and the Philippines.
 
It is funny that the scare fanned across Metro Manila--a good six or seven hundred kilometers away, covered by the mountain ranges of Cagayan and Quezon provinces--that a bishop called on the people to pray.  How silly Filipinos must look to the Western powers.
 
The NoKor nation and its leaders are made out to be mindless and stupid fanatics by Western propaganda, which some Philippine "intelligentsia" pick up perfunctorily.  One view from a religious official repeats the lie that NoKor leaders "allow its people to starve," betraying ignorance of historical realities of Korea.
 
The geography of many nations--and Korea is no different--is often divided into a northern region of cold climes that is harsh on agriculture and a warmer south conducive to food production.  For North Korea, this reality, plus the economic sanctions and embargo imposed by the US (as was done to countries like Cuba or Iran), have severely limited the influx of agricultural inputs and goods.
 
That North Korea uses technology or arms development as leverage, as its political-defense potential to obtain food reserves, is a testament to its concern. The West, in actually, merely sheds crocodile tears for hungry people as it does for Africa.  It does not give a damn if, say, Iran has had to rush importing hundreds of thousands of tons of grain just to beat the recent US economic sanctions deadline.
 
The "missile test" claim is belied by the opportunity given to Filipinos to witness and verify the truth about this NoKor rocket launch.  Over his radio program on dwAD, Rep. Crispin "Boying" Remulla informed the audience that he was officially invited to visit North Korea and observe its test launch.  Unfortunately, the congressman declined the invitation for reasons he could not satisfactorily provide.
 
As a public official of the Philippines privileged to be invited to the rocket launch, Remulla had a duty to the Filipino people to proceed to Pyongyang to ascertain the nature and intent of the move.  He could have then either confirmed or denied to all the veracity of US and Japanese allegations.
 
Boying did, I recall, say something about his need to be "careful;" hence, declining the invitation; but "careful" for what he did not say.  Was he afraid of offending the US Embassy or of losing his US visa?  I wonder.
 
From the US State Department to Wall Street, the imperial Mandarins always get good laughs from the Philippines.  One recent headline must surely have made them happy: "Gov't readies vaccine PPP."
 
The PPP (Public-Private Partnership) projects are the old BOT (Build-Operate-Transfer) and hybrid IPP (Independent Power Producer) scams where government contributes taxpayers' money, grants sovereign guaranteed contracts for a captive Filipino market in joint ventures with private  corporations (usually foreign firms or with local dummies) which it securitizes to raise funds then charges exorbitant "deregulated" rates or prices.
 
The PPP Center said that "government can save approximately P240 million to P360 million out of the P1.2 billion annual purchase cost of the vaccines."  But, that is, if the vaccines are needed at all.
 
The necessity of vaccines is being questioned more and more as the primary role of nutrition on overall health is increasingly being recognized.  Besides, Gloria Arroyo bought billions of Swine Flu vaccines in 2010 and where are they today?
 
The imperial Mandarins have time and time again turned every Philippine crisis into their opportunity.  One headline reveals what they have in mind for the Mindanao power price crisis: "Mindanao may go nuke."  Of course, this is uranium nuke, which is "so last century." After Chernobyl and Fukushima, uranium must be shelved forever, with the correct nuclear technology being thorium nuclear power.
 
China and India are already in this direction.  Thorium is four times more abundant than uranium (as we have our own in Palawan).  It produces less than 1 percent waste of today's uranium reactors and cannot be weaponized; it is failsafe and thus costs a fraction of uranium reactors to build; and, according to Filipino physicist Dr. Roger Posadas, Filipinos have existing technology to build them indigenously.  But, instead of pursuing this track, the imperial Mandarins are getting their surrogates to unload their poison plants and uranium stockpiles on our country.
 
The already laughing US Mandarins must be laughing off their butts more as they await the so-called power summit in Davao--which they expect would be pretty much like what they have witnessed in summits past. They should know because weren't they the ones who foisted the Epira (Electric Power Industry Reform Act) on us Filipinos?
 
Ah, but they need not wait for yesterday alone a headline already declared, "Metro brown outs loom" with a subtitle, "Power rate increases also feared with Malampaya Facility's Shutdown"--thanks to Shell-Texaco. Well, that ought to be thanks to Cory Aquino and the Yellows for giving the oil and power sectors to them.
 
In the meantime, while fear over the NoKor rocket is kept up, NASA has a $750 million Upper Atmosphere Research Satellite (UARS) satellite set to fall from the sky in weeks; its pieces likely landing in densely populated areas on six continents, including parts of Britain, Europe, North and South America, and Asia.  No scare there?
 
(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on "More Hocus PCOS" with Bono Adaza and Jun Estrella; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Monday, April 9, 2012

Brics for progress

DIE HARD III
Herman Tiu Laurel
4/9/2012



The religious holidays are over and we’re back to the realities of the Filipino’s deteriorating everyday life. Very soon — that is next month — electricity bills reflecting yet another hike in the already highest power rate in Asia will confront each and every power consumer anew. Meanwhile, as the Mindanao power crisis rages on despite the flurry of PR pronouncements about official action on the matter, government still declares that Mindanaoans must either pay up or shut up in the darkness. One electric cooperative not standing down on the blackmail was recently mentioned in an e-mail by our fellow power consumer protectionist crusader, Jojo Borja, a major shareholder in Iligan Light and Power Inc. (ILPI).

Borja relays that “According to Barangay Captain Mateo Cortez, who is also Vice President of the Northern Mindanao Cooperative (Normic)… (at) a public hearing that was attended by Napocor (National Power Corp.) and NGCP (National Grid Corp. of the Philippines)… (but which) Psalm (Power Sector Assets and Liabilities Management Corp.) did not attend… members of the 33 Rural Cooperatives of Mindanao… instead opted for darkness as they refused to be blackmailed by Therma Marine Inc. (TMI) into signing very expensive long-term Power Sales Agreements (PSA).”

However, “with the recent ‘orders’ of (Energy Secretary) Almendras that they must buy (power from TMI)… they (have agreed) but only for one year to give Psalm enough time to repair the four power barges (of Napocor),” adding that “If Aboitiz will insist on a five-year take-or-pay contract… the cooperatives would rather choose the rolling brownouts.”

“In the case of Iligan City,” Borja says, “the ERC (Energy Regulatory Commission) already approved the PSA between Mapalad Energy Generation Corp. and ILPI. In spite of (his appeals) to ERC that the consumers of ILPI own a 104-MW (power plant) and that ILPI should not buy 2 units of 7.5-MW (megawatt) diesel, inefficient, obsolete power generation plants at P400 million, ERC railroaded the approval of an additional generation cost of P2.23 per kilowatt-hour (kWh) for the next 20 years — a rate that will increase after the first year for cost overruns (similar to what TMI did) and every three years thereafter as the value of the obsolete power plants will be reappraised as… allowed by the Epira (Electric Power Industry Reform Act).”

The first part of the e-mail is self-explanatory; but what is striking is Normic preferring the “rolling brownouts” over paying 50 percent additional to TMI which will provide the electricity from two power barges the Aboitiz Group “bought” from Napocor-Psalm — the two power barges reappraised from $30 million to $80 million to hike the rate base for their electricity supply, to allow the selling of power at P11/kWh compared to the normal P2.60/kWh in Mindanao.

The latter part highlights Epira’s distorted and corrupt consequences — in this case Iligan City, which acquired the 104-MW BOT (build-operate-transfer) power plant from the Alcantaras’ IPP (independent power producer) that was transferred back to Napocor due to non-payment of real estate taxes. As the crisis wore on, Iligan wanted to operate the plant. But for some unknown reason, ERC refused to give it provisional authority and instead approved new capacity at a higher additional cost imposed for the next 20 years.

It must be recalled that the 2001 Epira passage was an imposition of the (International Monetary Fund) IMF and its subalterns, the World Bank (WB) and the Asian Development Bank (ADB), in return for approval of stand-by and emergency loans of around $1.2 billion. Today, we find ourselves entrapped in a vicious cycle of power distortion and corruption created by Epira’s privatization and deregulation of power.

For this reason, the recent IMF pronouncements on “reforms” in the Philippines in this second decade of the 21st Century merely smack of rank hypocrisy and deception.

Last March 20, the WB through its country economist for the Philippines issued statements urging the Philippines to “speed up reforms,” saying “there should be measures to lower power rates.” Well, they certainly would never say that these measures are now improbable because of the convoluted rules made into law and instituted by the Epira that make government itself helpless in the face of an escalating crisis — that is, unless the Epira is repealed.

Let us be clear: An amendment to the Epira will just be a delusion since it is privatization itself that is at the crux of the unjust law.

So you may ask: Why the title for this column? The answer will become clear once we zero in on this welcome news: “Brics Bank to Rival World Bank and IMF and Challenge Dollar Dominance.”

Brics (Brazil, Russia, India, China, and South Africa), in its recent meeting in India, agreed to establish a “Brics Bank” that would fund development projects and infrastructure in developing nations, in order to reduce dependence on the dollar by conducting trade between the five nations in their own currencies, thereby positioning these as internationally-traded currencies.

With the Brics bank, the Philippines in the future would no longer have to be dependent on the exploitative conditionalities and policies of the IMF-WB-ADB three-headed hydra.

Finally, the multilateral financial institutions of the West will have competition and Third World countries can have choices in sourcing financial support for development needs.

If only Brics were around in 2001, the Philippines may not have been entrapped in the Epira nightmare.

Naturally, the Western press has not been happy with this development. Jeremy Warner of London’s The Telegraph (in “Why a Brics-built bank to rival IMF is doomed to fail”) writes: “Outside endemic corruption, uncertain or wholly absent rule of law, and relatively low per capita income and life expectancy, there wouldn’t appear to be much that unites this disparate collection of nations…” Well, news flash: Such statements reflect more the true state of Wall Street, Obama, and the Eurozone now trapped in the death throes of their financial crisis than anything else.

(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN’s HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on “Fuel price crisis: Solutions” with consumer advocate Dr. Amanda Cruz and FDC; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Thursday, April 5, 2012

Serge: Economic saboteur

CONSUMERS' DEMAND!
Herman Tiu Laurel
4/2-8/2012



I cannot count anymore the many articles and columns I have written over the years for OpinYon and other newspapers on the economically devastating high power cost in the Philippines; but the issue that has festered over 10 years now still plagues the country. Last week the statistics on the region’s power prices confirm again that Metro Manila has the highest overall rates in comparison to other major cities in Asia. A study made by Australian firm, International Energy Consultants, contracted by the PCCI (Philippine Chamber of Commerce and Industry) culled the following data from the 2011 survey of JETRO (Japan Export Trade Organization):

Manila at $0.23 per kWh (kilowatt-hour); Tokyo and Singapore at $0.20 per kWh; Sydney and Cebu at $0.19 per kWh; Colombo at $0.18 per kWh; Mumbai at $0.16 per kWh; Phnom Penh at $0.15 per kWh; Hong Kong at $0.14 per kWh; Auckland and Taipei at $0.12 per kWh; Kuala Lumpur and Karachi at $0.11 per kWh; Shenzhen and Chennai at $0.10 per kWh; and Jakarta, Shanghai, Guangzhou, and New Delhi at $0.09 per kWh.

The report also explains that even if the Philippines may only be 5th or 6th highest in the Asia in terms of business power rates, the truth is, Philippine residential consumers are the ones subsidizing commercial/industrial users.

As our colleague in the Anti-Power Plunder Group Butch Junia repeatedly points out, Philippine residential power consumers constitute 67% of Meralco’s revenues but consume only 31% of its distributed power while, inversely, the much lower priced commercial/industrial users constitute 33% of Meralco’s revenues while consuming 69% of its output.

The leading and senior member of our group Mang Naro Lualhati (who was one of those who won the P30-billion Meralco refund for consumers in 2003) charges that the giant malls owned by Filipino billionaires listed in the Fortune 500 pay as low as $0.005 per kWh compared to $0.23 per kWh for us poor ordinary folk.

The power price issue came to a head again the past two weeks because the recent Mindanao electricity blackouts have already brought massive economic damage to that major Philippine island. As this electricity shit has hit the fan, with the stench of the power oligarchs reeking all over the place, now, even government officials--from city mayors and governors, to congressmen and senators--are speaking out against this “intentional” power crisis. For the people of Mindanao, it is clear that this “artificial shortage” is designed to force them into signing 20-year long-term IPP (independent power producer) contracts with rates that are astronomically higher than what they have been used to with their hydroelectric plants. Their only problem is, successive Yellow regimes--from past to present--have been “Noynoying” on the issue, particularly with the proper maintenance of these plants as what common sense dictates.

The NGCP (National Grid Corp. of the Philippines), the privatized power transmission backbone of the country, has been fingered as a major culprit in the current crisis. Mindanao politicians suspect that the NGCP is creating a situation that will force the privatization of the Agus-Pulangi hydro system to enable it to link this to the grid and sell its hydroelectric power, which now costs only less that P0.01 per kWh, at par with the Visayas and Luzon level of P5 per kWh. You will read and hear echoes of this plan from the Senate’s energy committee chair Serge Osmeña who reiterates one lie after another to continue justifying the EPIRA (Electric Power Industry Reform Act).

Osmeña, who has picked up the cudgels to defend the present privatized national electricity structure, openly says the Agus-Pulangi should not be allowed to compete with the privatized power utilities; hence, he’d rather raise the rates of hydroelectricity to support the expensive rates of the private utilities.

The argument for the EPIRA when it was proposed was that the state-owned Napocor (National Power Corp.), with its monopoly of the power industry, was too big to be efficient.

Yet today, in defending Energy Secretary Rene Almendras’ disastrous handling of the Mindanao power crisis, Osmeña speaks of “economies of scale” where “electricity would be cheaper for everyone if distributed over a bigger transmission grid than a smaller one.”

Why the shift in tone, Serge? Is it because much of the elite--a class to which you belong--have already formed an oligopoly in the sector and are using their clout to blackmail the entire nation into swallowing the “highest power cost in Asia?”

To wit, Osmeña even argues, “The national reform policy on electricity… was to harness the finances and management talents of the private sector in ensuring that the country would be supplied in a timely manner with dependable, quality and reasonably priced power…”

Independent Power Producers (IPP) are private utility companies established on the basis of state “sovereign guarantees” and/or securitization of captive consumers’ aggregate payments in a contract period. Securitization comes in “the form of financial instruments used to obtain funds from… investors… backed by amortizing cash flows;” while these cash flows, in turn, are derived from the pockets of millions of electricity consumers. Securitization was done by the Republic of the Philippines to launch the Napocor; and as government did not shell out any money, only acting as an intermediary of the funds from power consumers, the power sector has NEVER been subsidized.

When Napocor was still in control of the state’s power assets, the price of Philippine electricity was not only competitive but one of the lowest in Asia. Today, after privatization, power costs have shot up way into the stratosphere.

In Mindanao today, we see the IPPs blackmailing consumers the way the privatized Aboitiz Group Power Barges 117 and 118 and the now Lopez-run Mt. Apo Geothermal are being used to force Mindanaoans into accepting 20-year, exorbitantly priced contracts or else continue being denied much-needed electricity. But isn’t price a reflection of these privatization advocates’ much-vaunted “efficiency?” Therefore, aren’t they and other utilities like Meralco guilty of doing their jobs at a very high cost to the nation and, in fact, destroying its entire economy?

Given that these oligarchs are only “efficient” from the point of view of profit extraction, and totally delinquent in providing efficient and reliable electricity at the least cost to consumers, why should we accept this, especially since things have gone from bad to worse despite 90 percent of the power sector being privatized?

Ah, but Osmeña remains undaunted. He says “Napocor was bankrupt and that even if it sold all of its assets, it still could not cover its liabilities.”

Napocor was a very healthy public corporation before Cory Aquino, her Yellow gang, and her oligarch-patrons took over the reins of the Philippine Republic. They abolished the Ministry of Energy and placed its functions under the Office of the President to ensure an efficient dismantling of the nation’s energy development program. They established almost a dozen IPPs and cancelled half a dozen major energy projects, including the Bataan Nuclear Power Plant, leading to a “Dark Age” under a Cory-appointed oligarch, Ernesto Aboitiz, as Napocor head. Then Ramos signed 43 more plundering IPP contracts with the infamous PPA (power purchase agreements), causing the most massive bloodletting of Napocor’s resources to this day, via $18-billion so-called stranded debts that EPIRA was supposed to erase but never did. Meanwhile, $10 billion worth of privatized assets payments have not yet been received.

Still, Osmeña isn’t alone in his prevarication. The current House Speaker, Sonny Belmonte, when pressed for a response to the crescendo of complaints from Mindanao lawmakers, said, “We have to investigate (the power crisis) to know what is going on.” Considering who the distribution source of the EPIRA congressional payola in 2001 really is, I’d say Belmonte is merely humoring us.

On a slightly positive note, despite my earlier falling out with the elder Sen. Nene Pimentel’s over his signing of the EPIRA, I am hopeful that the younger Pimentel will take up the energy cause in the Upper Chamber this time. My only concern is that he may have weakened his position this early when he stated, “If I need to personally beg to Sen. Osmeña to hold the inquiry before the Holy Week break, I will have to.”

First, Koko, you don’t have to beg; your duty lies with the people. You have all the right to demand what is fair and just. Secondly, expecting someone like Osmeña to investigate the power crisis is like assigning a blood bank heist to be investigated by a vampire where other vampires are suspect.

The Senate, if it is to do a real service to the people, should investigate the power mess as a whole and prosecute those to be found guilty in the “intentional” and “artificial shortage,” charging them with no less than “economic sabotage.” And if our senators will just do their jobs right, I would not be surprised if Serge and his oligarch kin, along with his NUCD-UMDP comrade Fidel Ramos, will end up as guilty.

(Tune in to 1098AM, DWAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN’s HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., on “Mindanao power blackmail? Part II;” visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)