Crocodile with tears

CONSUMERS' DEMAND!
Herman Tiu Laurel
3/19-25/2012

A little over a week ago, an article appeared in one of the dailies entitled, "The importance of country competitiveness."  It argued for the Philippines to ensure making the grade in global ratings surveys, such as those of Transparency International's Corruption Index, as well as with regard to firm level competitiveness and human resources development through education and "inclusive growth" that responds to the needs of the country's population.  Reading particularly the last prescriptions, I could not help but see a crocodile with tears emoting through the lines as Jaime Augusto Zobel de Ayala (JAZA) expounded on how he believes the Philippines must behave in order to be more competitive.  Nowhere in the real estate tycoon's 923 words do the phrase "Asia's highest electricity prices," "rentier oligarchs," or "exorbitant water bills" appear--three main issues that I attribute to the nation's loss of competitiveness, stunted agro-industrial economy, and the exploitation of the people.

 

The reference point of JAZA's corruption indicators, Transparency International (TI), is an institution that was created by the World Bank (WB) and Western financial interests to confine the definition of "corruption" to their advantage.  Western societies today are controlled by finance capitalists intent on monopolizing the wealth and power of the world through debt and global financial pyramiding schemes that have bankrupted nations, as what had happened to the so-called PIGS (Portugal, Italy, Greece, and Spain).  The WB-TI combine looks only at government corruption and not private financial corruption, which is the mother of all corruption.  Moreover, the tandem is part of a larger network involving the International Monetary Fund (IMF) and the Paris Club (an informal group of global bankers) to serve up the world on a platter to financial predators.  We'll never see the TI investigate, expose, nor condemn, say, the Wall Street bankers' corruption that led to the 2008 Global Financial Crash.

 

JAZA's gibberish about why the Philippines lags in global competitiveness completely misses any mention of high electricity costs in the country, often cited by many companies that have left the country for other investment sites where power costs are much lower, such as Vietnam.  Why doesn't JAZA mention this fundamental problem of our country's exorbitant electricity cost?  The reason for his deaf, dumb, and blind reaction is that energy privatization is one of the diktats of Western financial interests.  This is evidenced by the aggressive campaign of multilaterals, such as the IMF, WB, ADB (Asian Development Bank), as well as bilaterals, such as USAID, in imposing privatization and deregulation of the electricity sectors in subordinated countries in the Third World.  JAZA isn't really interested in the root cause of our country's lack of competitiveness; he's just making a show of superficially discussing it, which makes him a total wimp.

 

In November 2011, Nora Halili Lao, a trustee of the Philippine Exporters Confederation Inc. (PhilExport), said, "electricity costs account for 40 to 50 percent of exporters' total operating expenses.  Considering this, it is difficult for exporters from the Philippines to price their products at more competitive levels… even those (companies that) have already invested in the country are now contemplating (on) moving to either China or Vietnam since the high electricity rates in the Philippines have made them lose their competitive advantage in the global market."  In the same year, Federation of Philippine Industries chairman Meneleo Carlos Jr. said, "the prohibitive cost of electricity in the country must be the biggest reason why foreign investments have been shrinking in the Philippines, while it is kicking up in other countries in the region."  Even more significantly, the same report stated that the Philippines is the only country that has privatized its power industry.

 

Public relations (PR) hacks of the old Philippine elite tout the known members of the oligarchy as icons of business excellence; hence, the special attention to their business opinions.  But are they really credible?  The Ayalas have been mere rentiers exploiting privilege and power never earned.  Their business empire was built on 1,616 hectares of Hacienda de San Pedro de Makati "acquired" (as was the practice of that time, riding on horseback from dawn to dusk) and 10,000 hectares of the "Roxas family playground" in Batangas--absolutely no sweat-and-tears entrepreneurship there.  In their 21st Century incarnation, they still haven't gone into manufacturing or high tech industries, as the export of semi-conductors, also a comprador business, merely takes advantage of low wages in the import and assembly of parts, not unlike their other rentier businesses, namely, the privatized water utilities, which make use of consumer cash flow to fund business development.  In essence, JAZA isn't worried about country competitiveness at all because high electricity prices don't matter to him; all he needs to do is raise rent and water rates.

 

JAZA writes: "National competitiveness simply cannot be achieved if majority of the population is struggling to meet their most basic needs."  My heart almost bled reading this because just last week, we received complaints from the water consuming  public about Ayala-owned Manila Water's collection policy on household consumers, disallowing the "Pay one, leave one" payment system, i.e. one month overdue plus one month due, slashing the homeowners' credit line for the most essential of household utilities.  This is aside from the fact that water utility charges have ballooned over 10 times from the time water service was privatized to the Ayalas and other oligarchs.  Notice the disparity between JAZA's actual practice and his lament over "the population struggling to meet (its) basic needs."

 

So what are we to make of these contradictions?  The dictionary states that "the practice of professing beliefs, feelings, or virtues that one does not hold or possess" is nothing but plain "hypocrisy," which, unfortunately, is the oil of commerce in this society of ours.

 

If any, what the era of privatization in the Philippines, along with the hardship it spawned, has exposed is the hypocrisy of the entire system.  That system, based on oligarchy-led economics, was ushered in by no less than the Edsa I counter-revolution against a state-led national development program, which put utilities and other strategic assets (and means of production) in the hands of the public.  The Nation-State must therefore be restored to pre-eminence so that our people's needs will be addressed and the oligarchs' monopolization of our national wealth be put to an end.

 

(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 "Mines: Bombs or boon?;" visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Power blackmail, fascism

DIE HARD III
Herman Tiu Laurel
3/19/2012



If we continue to have the kind of political leaders and economic managers that we have today, then this nation is a goner. Speaking to ANC last week on the current Mindanao power crisis, National Economic Development Authority (Neda) Assistant Director-General Ruperto Majuca practically admitted government sabotage for the non-dredging of the Agus-Pulangui hydroelectric river network despite ample warnings over the past decade. Besides this, he adverted to the absence of political will in making use of available power barges to get interim supply (which this column has repeatedly called for). Most importantly, he revealed the real agenda behind the engineered power shortage, saying, “Mindanao must soon get used to higher prices if the people want power.” Then, he even capped it off with an asinine “You cannot have your cake and eat it too” remark as a veiled threat to all Filipinos — that they should be happy to have electricity even at exorbitant prices (the highest in all of Asia), or else live without it.

Our GNN show over Destiny Cable and 300 other cable networks nationwide also tackled the same topic. But our guests were the more genuine stakeholders in this issue, namely, Jojo Borja (stockholder of Iligan Light and Power and an irate anti-power oligarchy crusader) and Wilson Fortaleza (formerly with the Freedom from Debt Coalition electricity consumer advocacy). Borja confirmed that as the power crisis continues to ravage Mindanao’s economy, everything from Internet cafés and restaurants to major manufacturing concerns have been forced to shut down, despite the fact that one power barge in Davao dedicated to the Holcim cement plant, as well as two power barges in Iloilo and one in Luzon, are merely lying idle. Fortaleza, who just came from a National Power Corp. (Napocor) union-sponsored visit to Agus-Pulangui, stressed that the system could still recover its full capacity to provide all the power Mindanao needs today — given the proper maintenance — and still at the current level of Mindanao’s hydro power production cost below one centavo per kilowatt-hour (kWh).

Borja even adds that another source of ready supply are the two power barges sold off by the Power Sector Assets and Liabilities Management (Psalm) Corp. to Therma Marine Inc. (TMI) for $30 million last 2009, which assets were priced a few months later at $80 million in order to be used as the basis for doubling electricity cost to consumers. The flipside, of course, is that the 33 electric cooperatives (ECs) in Mindanao are deterred from buying TMI-generated power, hence, the current quagmire the region is in.

But, instead of providing real solutions, what Department of Energy (DoE) Secretary and former Ayala and Aboitiz executive Jose Rene Almendras wants is to issue an order that will force all Mindanao power utility operators to purchase power from TMI even at a high cost. According to a March 5 report in Business Mirror (“Mindanao power problem nearing solution: DoE”), Almendras said that as “there are about 100 MW (megawatts) of undispatched power… they are now verifying reports that some of the electric cooperatives are hesitant to buy because (of the) the price differential… (prompting) the DoE (to possibly) issue a directive to compel the electric cooperatives to buy power even at a higher rate… (because) “At the end of the day, it’s the distributor who’s supposed to buy the necessary power to sell.’”

The “undispatched power” mentioned, of course, refers to the TMI power barges’ allocated capacity. As Almendras wants to force this down the throats of Mindanao’s utilities and consumers through a DoE order, those who fail to comply will certainly come under some pain of punishment, such as what was mentioned by a DoE undersecretary, who said that the Energy Department’s proposed circular “will allow the grid operator, the National Grid Corp. of the Philippines, to cut off power to erring utilities… (so that it would force them) to secure available power generation in the region at a higher price.”

This contemplated action is simple blackmail and fascism, with the DoE as the “muscle” and Almendras as the “enforcer,” all doing the bidding of the capo di tutti capi, the power oligarchs. All those “public” but privately-owned officials of the DoE, form the time of Gloria Arroyo to the present PeNoy Aquino administration, will someday face the wrath of the people and the courts of a new government — the way Iceland’s prime minister is now facing jail term for betraying his people in the financial and economic crisis since 2008.

The present oligarchy-controlled government will not always be on top and the more these oppressive impositions are pushed down the throats of our people, the earlier the day of reckoning shall be. The last example we cited is just a case of the debacle from the Electric Power Industry Reform Act of 2001 that gave way to the power sector’s massive privatization.

In 1993, the Alcantara Group was granted and commissioned a BOT (build- operate-and-transfer) project with Napocor’s $110-million 104 MW diesel-fired power plant complex (designated NMPC-1 and 2). Since Mindanao always had surplus power, these were hardly used. Ten years later these were turned over to Iligan City after Napocor failed to pay municipal taxes. But the city cannot operate the plants anymore as Epira bans government from engaging in power generation, besides the fact that the plants were built on an alleged overpriced Alcantara property that is now being refused for their operation.

The reason the Mindanao ECs and handful of private utilities refuse to buy overpriced TMI power is that this would lock them into paying for these high prices in the next 20 years for an engineered short-term power crisis, which the rains will resolve in a few months. The DoE and the oligarch-conspirators want to force these high priced contracts so that they can do the same when the Agus-Pulangui is privatized when the public will momentarily let down its guard.

Luckily, Mindanaoans today are not yielding. Having learned the bitter lessons from Luzon and Visayas’ power woes, their struggle may yet inspire the rest of the country to reverse the Epira totally and shove the pain it brought down those greedy power oligarchs’ sorry backsides.

(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 “Mining: Bomb or Boon?;” visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)