DIE HARD III
Herman Tiu Laurel
11/19/2010
Given the many issues that are basic to the well-being of the Filipino people such as electricity, water, public transport and toll ways that are not being dealt with by most columnists of mainstream media, I have made it a point to focus on them through this space. But whenever I see issues covered extensively by media being obfuscated by writers who rear their discriminatory heads, then I have to step into the fray.
The Philippine Airlines (PAL) vs PAL Employees Association (Palea) strike threat is a case in point. One the chief proponents of the privatization of state assets, economic liberalization advocate Solita Monsod, takes what I see as a double standard stand on the PAL vs Palea impasse, as she uses it as another opportunity for lambasting a favorite whipping boy of the Makati Business Club, a noisy group that shares her economic views.
That the global and local airline industry is going through precarious times is not in doubt. Monsod concedes that “the global economic crisis was in full flow in 2008 and 2009, and travel was a natural victim (with)… a 7 percent decrease in worldwide demand.” She also admits the adverse impact of new restrictions on the Philippine aviation industry by the US Federal Aviation Administration (FAA) and the International Civil Aviation Organization (ICAO) after our country was downgraded due to deficiencies in our Air Transportation Office (ATO) and the Civil Aviation Authority of the Philippines (CAAP).
What is not included, though, in that litany of problems besetting PAL is the flag carrier’s history of overstaffing before privatization, which previous management reorganizations constricted by government-led compromises could not optimally resolve. What PAL wouldn’t give to get the chance that other airlines such as Cebu Pacific had, which is to start from scratch — to start on the right foot.
One setback of PAL in the past three years came from losses on its hedge against aviation fuel price spikes in 2008. PAL reportedly incurred $150 to $300 million in losses when oil prices reversed and dove instead, as the global economic downturn took its toll.
Monsod and Palea keep attributing this loss only to management and says labor shouldn’t be punished for it. I don’t think PAL ever intended to take out that loss on anyone, but that hedge was a judgment call intended for the good of the company as a whole.
Fuel is obviously a fundamental cost in any airline operation. Securing oneself against fuel price spikes, which many expected at that time, was to PAL’s interest. A case can be made that fuel prices really could have gone right through the roof. If it had gone that way, all stakeholders in PAL — management, labor, and even government — would have reaped the benefit from the hedge.
Privatization was intended to pass management of the flag carrier from cumbersome state managers to private, professional managers. I have never been for privatization of state and public utility assets. I have fought it all the past decades; but the advocates of privatization should be consistent and leave private management’s prerogative alone so long as laws are strictly followed.
PAL’s spinoff of various non-core operations comes from a tenet of good business — focus. There is clearly nothing illegal in that spinoff, and the company is complying with its obligation to provide severance pay (increased to 1.25 month for every year of service), and offers new opportunities in the new spun-off companies to retrenched employees which would most likely lead to better future compensation as the companies grow with the synergy.
Those who expect the privatized company to perform like a social welfare enterprise could propose to start getting the state and government involved again. Do what the Japanese did to save their Japan Airlines (JAL). Their government pumped in 50 billion yen to turn it around, which was justified in JAL’s case as it is a government airline.
Detractors claim that the new spinoff companies are also invariably led by one relation or another of the PAL owners, but who best to invite new capital into this unattractive industry today than those who can assure new investors the good will with the core client?
PAL’s owners have actually unburdened government of a huge weight around its neck, and PAL’s privatization is the only privatization project where the public is ahead; unlike the privatization in power, water, toll ways, mass transit system and port handling. It’s a wonder why Monsod practically never critiques these other privatizations.
The recent bus transport strike in Metro Manila highlights another double standard: The Metropolitan Manila Development Authority (MMDA) and the Department of Transportation and Communications’ view of buses as traffic jam generators, while being blind to the over a hundred thousand private cars exclusively chauffeuring students to and from school, clogging up Edsa and its tributaries.
Buses serve five times more passengers per square meter than private vehicles, having much greater positive economic and social value. Private vehicles are inefficient commuter movers; only more “sosyal.” School buses should be mandatory in Metro Manila, where a special school bus network with communication radios and trained conductors that would unclog Metro roads by over a hundred thousand cars should be established. When I proposed this to Cory Aquino’s MMDA chief Elfren Cruz in 1991, he said: “Magagalit ang mayayaman.” (The rich will get angry.)
Frankly, this crackdown on buses may have a hidden agenda — make the MRT’s new coaches (and resulting higher rates) under the multi-million public-private partnership or PPP projects more lucrative for PeNoy’s invited “investors.”
(Tune in to Sulo ng Pilipino, Monday, Wednesday and Friday, 6 to 7 p.m. on 1098AM; watch Politics Today with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on Global News Network, Destiny Cable, now Channel 8; visit our blogs, http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com)
Friday, November 19, 2010
Monday, November 15, 2010
A growing movement
DIE HARD III
Herman Tiu Laurel
11/15/2010
Even as those photo ops between Clinton and PeNoy hit the newsstands, in aid of the massive PR spin on the US ’ support for its little puppet amid its dwindling influence in this part of the world, the conditions for creating an explosion of awareness on the true crisis in Filipinos’ lives are multiplying.
Most importantly, the middle class is now getting more and more energized in our fight against the blatant (and unprecedented) political and economic abuses in the privatized electricity, water, and infrastructure utilities of this nation.
One indication of this growing involvement is the flurry of Internet exchanges on power issues. An example is Edna’s (surname withheld) e-mail to Pete Ilagan of Nasecore (National Association of Electricity Consumers for Reforms, an anti-power plunder consumer group):
“Pete, you might want to check if ERC is actually adjusting the economic indices used in the calculation of the ARR of Meralco and other DUs under the PBR. These are the (a) Peso-US$ exchange rate, (b) Philippine CPI, and (c) US CPI. ERC is supposed to adjust them yearly.
“I am attaching a table that I made showing the forecast indices vs the actual. Note that for the Peso-US$ exchange rate, the forecasts are higher than the actual. For the US CPI, except for one year where actual was higher, the ERC forecasts were also higher than actual. If they’re not corrected, they will increase Meralco’s profit because these indices, especially the exchange rate and US CPI, are used to calculate the capex and depreciation costs, the major components of the rate base and ARR.”
If the indices used by the Energy Regulatory Commission (ERC) are regularly higher than the actual, then it is to be expected that it will always grant its approval to higher rates for the power generation, transmission and distribution firms that petition without fail for rate increases.
Since the ERC is invariably either derelict or in collusion with those petitioners, the public will never see the light on these outrageous distortions. Citizens and consumer groups hardly have any funds, but are fueled by their indignation over this naked manipulation, abuse, and exploitation by the utility regulatory agencies in the power sector, aside from the MWSS, LWUA and the Toll Regulatory Commission in others.
Citizens themselves are funding the necessary expenses, such as lawyers’ appearances at the ERC and in the courts. One donor is a former city mayor in Metro Manila who does not want to be named.
The latest initiative is beginning to bring together a renewed focus for the different crusaders, such as EmPower, Freedom from Debt Coalition (FDC), and Kaakbay, which have been at it since the start of the decade. FDC and EmPower have signified agreement to revive their own “lights out” call (switching off lights at some appointed time of the week), which were highly successful in select communities that involved hundreds of thousands of families. Even as other issues have sidetracked their campaigns, they are more than ready to reconnect with the broader effort this time around.
In December, the FDC is spearheading a nationwide summit on this crusade to be held in Baguio, as I was told by Job Bordamonte of FDC during our discussion on my TV program. I’m very excited about this and this column aims to start disseminating the information. There have been ebbs and flows in the struggle but a crescendo is building again.
Still, I got an indication of the attitude of the masses to this problem of exorbitant electricity costs. One of my former media staff, Glecy, whom I was with when she was asked about her community’s take on this issue, said, “Wala naman kaming magagawa.” (We can’t do anything about it.)
This sense of helplessness and hopelessness is what the oligarchs and their media are banking on as they continue to instill this into the masses’ subconscious through progressive impoverishment, fascist suppression of past protests (joined in by the masa), media blackout of power news through entertainment distraction, plus ERC connivance to frustrate every legitimate effort to thwart the abuse by the power oligarchs.
The critical situation prevails from RP’s north to south, and this column has tried to reflect it all. As of this writing, news of four-hour blackouts in the Visayas.
I was informed that in the Negros islands and towns such as Sipalay, four-hour power outages have become prevalent. In Mindanao, our decade-long crusader there is under threat of assassination. Yes, he fears for his life there for the exposés he has made on the IPPs’ (independent power producers) many abuses; and for this reason he has been reluctant to take a high profile in media on the issue.
I have been telling his friends that his security can only be assured when he comes out fighting a total war — including becoming an anti-power plunder celebrity. I hope he takes my advice as we are ready to help him all the way. The good thing is that he has been linking with us in the Metro Manila networks. As I said, the movement is growing again — so the masa need not feel helpless anymore. Remember: “Lights Out Mondays,” 7 to 7:10 p.m.
(Tune in to Sulo ng Pilipino, Monday, Wednesday, and Friday, 6 to 7 p.m. on 1098AM; watch Politics Today with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on “Power Consumers’ Legislative Champions: Reps. Bernadette Herrera and Toby Tiangco,” on Global News Network, Destiny Cable Channel 21; visit our blogs, http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com)
Herman Tiu Laurel
11/15/2010
Even as those photo ops between Clinton and PeNoy hit the newsstands, in aid of the massive PR spin on the US ’ support for its little puppet amid its dwindling influence in this part of the world, the conditions for creating an explosion of awareness on the true crisis in Filipinos’ lives are multiplying.
Most importantly, the middle class is now getting more and more energized in our fight against the blatant (and unprecedented) political and economic abuses in the privatized electricity, water, and infrastructure utilities of this nation.
One indication of this growing involvement is the flurry of Internet exchanges on power issues. An example is Edna’s (surname withheld) e-mail to Pete Ilagan of Nasecore (National Association of Electricity Consumers for Reforms, an anti-power plunder consumer group):
“Pete, you might want to check if ERC is actually adjusting the economic indices used in the calculation of the ARR of Meralco and other DUs under the PBR. These are the (a) Peso-US$ exchange rate, (b) Philippine CPI, and (c) US CPI. ERC is supposed to adjust them yearly.
“I am attaching a table that I made showing the forecast indices vs the actual. Note that for the Peso-US$ exchange rate, the forecasts are higher than the actual. For the US CPI, except for one year where actual was higher, the ERC forecasts were also higher than actual. If they’re not corrected, they will increase Meralco’s profit because these indices, especially the exchange rate and US CPI, are used to calculate the capex and depreciation costs, the major components of the rate base and ARR.”
If the indices used by the Energy Regulatory Commission (ERC) are regularly higher than the actual, then it is to be expected that it will always grant its approval to higher rates for the power generation, transmission and distribution firms that petition without fail for rate increases.
Since the ERC is invariably either derelict or in collusion with those petitioners, the public will never see the light on these outrageous distortions. Citizens and consumer groups hardly have any funds, but are fueled by their indignation over this naked manipulation, abuse, and exploitation by the utility regulatory agencies in the power sector, aside from the MWSS, LWUA and the Toll Regulatory Commission in others.
Citizens themselves are funding the necessary expenses, such as lawyers’ appearances at the ERC and in the courts. One donor is a former city mayor in Metro Manila who does not want to be named.
The latest initiative is beginning to bring together a renewed focus for the different crusaders, such as EmPower, Freedom from Debt Coalition (FDC), and Kaakbay, which have been at it since the start of the decade. FDC and EmPower have signified agreement to revive their own “lights out” call (switching off lights at some appointed time of the week), which were highly successful in select communities that involved hundreds of thousands of families. Even as other issues have sidetracked their campaigns, they are more than ready to reconnect with the broader effort this time around.
In December, the FDC is spearheading a nationwide summit on this crusade to be held in Baguio, as I was told by Job Bordamonte of FDC during our discussion on my TV program. I’m very excited about this and this column aims to start disseminating the information. There have been ebbs and flows in the struggle but a crescendo is building again.
Still, I got an indication of the attitude of the masses to this problem of exorbitant electricity costs. One of my former media staff, Glecy, whom I was with when she was asked about her community’s take on this issue, said, “Wala naman kaming magagawa.” (We can’t do anything about it.)
This sense of helplessness and hopelessness is what the oligarchs and their media are banking on as they continue to instill this into the masses’ subconscious through progressive impoverishment, fascist suppression of past protests (joined in by the masa), media blackout of power news through entertainment distraction, plus ERC connivance to frustrate every legitimate effort to thwart the abuse by the power oligarchs.
The critical situation prevails from RP’s north to south, and this column has tried to reflect it all. As of this writing, news of four-hour blackouts in the Visayas.
I was informed that in the Negros islands and towns such as Sipalay, four-hour power outages have become prevalent. In Mindanao, our decade-long crusader there is under threat of assassination. Yes, he fears for his life there for the exposés he has made on the IPPs’ (independent power producers) many abuses; and for this reason he has been reluctant to take a high profile in media on the issue.
I have been telling his friends that his security can only be assured when he comes out fighting a total war — including becoming an anti-power plunder celebrity. I hope he takes my advice as we are ready to help him all the way. The good thing is that he has been linking with us in the Metro Manila networks. As I said, the movement is growing again — so the masa need not feel helpless anymore. Remember: “Lights Out Mondays,” 7 to 7:10 p.m.
(Tune in to Sulo ng Pilipino, Monday, Wednesday, and Friday, 6 to 7 p.m. on 1098AM; watch Politics Today with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on “Power Consumers’ Legislative Champions: Reps. Bernadette Herrera and Toby Tiangco,” on Global News Network, Destiny Cable Channel 21; visit our blogs, http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com)
Friday, November 12, 2010
The sovereign, nationalist direction
DIE HARD III
Herman Tiu Laurel
11/12/2010
Much as I would like to take even a day off from the endless electricity price gouging and swindles, I am not able to. The news every day brings up new cases of the blatant defrauding of the Filipino power consumers by the Energy Regulatory Commission (ERC), together with the big private power companies, as well as the silence of the nation’s legislature.
A few days ago, this headline came up: “Aboitiz Equity income jumps 128 percent to P5.6B in Q3.” Looking closely into the details, one reads: “The power group continued to account for the biggest chunk of the income pie with an 83 percent share, followed by the banking and food groups…”
No doubt that 83-percent increase attributed to the Aboitiz power group came from the company’s deal with the Power Sector Assets and Liabilities Management Corp. (Psalm), wherein it got to buy the state’s power barges 117 and 118 for a third of what was declared to the ERC when it subsequently entered into a deal for those same barges to fill in for the “energy crisis” in Mindanao.
That threefold increase in valuation, which Therma Marine Inc. of the Aboitiz group submitted to the ERC, was made the basis for setting the current power rates in Mindanao, which, as we reported and powerfully expounded on the floor of Congress by a Mindanao congressman, “have virtually doubled from March to April and May this year.” It was stated further that “In 2009, we paid P49.70 per kWh/month. However, last April we paid P360 per kWh/month and P606 per kWh/month in May 2010. This had caused untold sufferings and hardships to our people in Mindanao, especially the poor.”
Those hardships and sufferings now translate to the huge, heartless, and indecent income jump of 128 percent of the Aboitiz Equity group. And yet this dwarfs what the company got in 2001.
After colluding with the Edsa II power grab of Gloria Arroyo, the Aboitiz group got the newly-installed regime to transfer P20 billion in GSIS (Government Service Insurance System) deposits in the Land Bank of the Philippines — one of our largest and most stable government banks, with over 500 ATMs to service GSIS members — to its own banking interest, Unionbank, which had only less than 50 ATMs at that time.
It was patently illegal since GSIS deposits should always be deposited in a government bank. But aside from being disadvantageous to government, it was also a disservice to the million and a half GSIS members as Unionbank was not in a position to service them efficiently — which resulted in the many years of horrendous complaints about Unionbank and its eCard system with the GSIS. Ten years have passed and despite the continuing abuses, none of these transgressions have been punished.
The abuse by the oligarchs is part and parcel of the continuing policy of liberalization and privatization of the Philippine economy. It has destroyed the public sector and dismantled public, shared ownership of the nation’s wealth and resources by transferring these only to a few — just a dozen or so — corporate oligarchs through which the Western powers plunder the nation.
The mother of all this plunder, in turn, has been the liberalization of our currency and capital regime, which is now highlighted by the ongoing collapse of globalization in the world economy via the currency war that is a-building. This, as self-respecting and self-caring nations start escalating a series of protectionist measures for their economies.
From Brazil (which has raised its tax on foreign investments in its bonds from two to four, and now six percent) to Japan (which has shocked everyone by intervening last September to weaken its yen and announcing this month that it will continue to maintain its weak yen policy), nations are opposing the US’ move to strengthen everyone else’s currency by weakening its own.
All, it seems, except for the Philippines, which is under the IMF-WB (International Monetary Fund-World Bank) stooge Cesar Purisima, who has proudly declared the dollars invested in his $1-billion bonds as tax exempt, thereby strengthening the peso and weakening the dollar, and resulting in punishing losses for our OFWs, export industries, and call centers.
The Aquino government tries to look for some silver lining, such as looking to prepay foreign loans as it takes fewer pesos to pay dollar debts; but the dark clouds are overwhelming.
As oil is already projected to rise to $100/bbl soon, since oil producing countries have set higher prices to compensate for the declining value of the dollar in which the trade is denominated; rice producing countries will certainly do the same. At the same time, without currency and trade restriction, imports from the US will rise and domestic agriculture and industries will suffer even more.
Even without the dollar devaluation, our poultries and piggeries have already been under a lot of pressure from US exports of chicken and pork parts, as our car industry has suffered from American imports. With the dollar devaluation, coupled with the elite and Filipino consumers’ penchant for imports, this will even worsen dramatically.
The only course, if this country is to survive and grow again, is the sovereign and nationalist economic direction. And this is something we hope the Aquino III regime can still learn. If not, then we can expect the pressure for an unscheduled regime change to be in the cards within a year’s time.
(Tune in to Sulo ng Pilipino, Monday, Wednesday and Friday, 6 to 7 p.m. on 1098AM; watch Politics Today with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on “Power Consumers’ Legislative Champions: Reps. Bernadette Herrera and Toby Tiangco,” on Global News Network, Destiny Cable Channel 21; visit our blogs, http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com)
Herman Tiu Laurel
11/12/2010
Much as I would like to take even a day off from the endless electricity price gouging and swindles, I am not able to. The news every day brings up new cases of the blatant defrauding of the Filipino power consumers by the Energy Regulatory Commission (ERC), together with the big private power companies, as well as the silence of the nation’s legislature.
A few days ago, this headline came up: “Aboitiz Equity income jumps 128 percent to P5.6B in Q3.” Looking closely into the details, one reads: “The power group continued to account for the biggest chunk of the income pie with an 83 percent share, followed by the banking and food groups…”
No doubt that 83-percent increase attributed to the Aboitiz power group came from the company’s deal with the Power Sector Assets and Liabilities Management Corp. (Psalm), wherein it got to buy the state’s power barges 117 and 118 for a third of what was declared to the ERC when it subsequently entered into a deal for those same barges to fill in for the “energy crisis” in Mindanao.
That threefold increase in valuation, which Therma Marine Inc. of the Aboitiz group submitted to the ERC, was made the basis for setting the current power rates in Mindanao, which, as we reported and powerfully expounded on the floor of Congress by a Mindanao congressman, “have virtually doubled from March to April and May this year.” It was stated further that “In 2009, we paid P49.70 per kWh/month. However, last April we paid P360 per kWh/month and P606 per kWh/month in May 2010. This had caused untold sufferings and hardships to our people in Mindanao, especially the poor.”
Those hardships and sufferings now translate to the huge, heartless, and indecent income jump of 128 percent of the Aboitiz Equity group. And yet this dwarfs what the company got in 2001.
After colluding with the Edsa II power grab of Gloria Arroyo, the Aboitiz group got the newly-installed regime to transfer P20 billion in GSIS (Government Service Insurance System) deposits in the Land Bank of the Philippines — one of our largest and most stable government banks, with over 500 ATMs to service GSIS members — to its own banking interest, Unionbank, which had only less than 50 ATMs at that time.
It was patently illegal since GSIS deposits should always be deposited in a government bank. But aside from being disadvantageous to government, it was also a disservice to the million and a half GSIS members as Unionbank was not in a position to service them efficiently — which resulted in the many years of horrendous complaints about Unionbank and its eCard system with the GSIS. Ten years have passed and despite the continuing abuses, none of these transgressions have been punished.
The abuse by the oligarchs is part and parcel of the continuing policy of liberalization and privatization of the Philippine economy. It has destroyed the public sector and dismantled public, shared ownership of the nation’s wealth and resources by transferring these only to a few — just a dozen or so — corporate oligarchs through which the Western powers plunder the nation.
The mother of all this plunder, in turn, has been the liberalization of our currency and capital regime, which is now highlighted by the ongoing collapse of globalization in the world economy via the currency war that is a-building. This, as self-respecting and self-caring nations start escalating a series of protectionist measures for their economies.
From Brazil (which has raised its tax on foreign investments in its bonds from two to four, and now six percent) to Japan (which has shocked everyone by intervening last September to weaken its yen and announcing this month that it will continue to maintain its weak yen policy), nations are opposing the US’ move to strengthen everyone else’s currency by weakening its own.
All, it seems, except for the Philippines, which is under the IMF-WB (International Monetary Fund-World Bank) stooge Cesar Purisima, who has proudly declared the dollars invested in his $1-billion bonds as tax exempt, thereby strengthening the peso and weakening the dollar, and resulting in punishing losses for our OFWs, export industries, and call centers.
The Aquino government tries to look for some silver lining, such as looking to prepay foreign loans as it takes fewer pesos to pay dollar debts; but the dark clouds are overwhelming.
As oil is already projected to rise to $100/bbl soon, since oil producing countries have set higher prices to compensate for the declining value of the dollar in which the trade is denominated; rice producing countries will certainly do the same. At the same time, without currency and trade restriction, imports from the US will rise and domestic agriculture and industries will suffer even more.
Even without the dollar devaluation, our poultries and piggeries have already been under a lot of pressure from US exports of chicken and pork parts, as our car industry has suffered from American imports. With the dollar devaluation, coupled with the elite and Filipino consumers’ penchant for imports, this will even worsen dramatically.
The only course, if this country is to survive and grow again, is the sovereign and nationalist economic direction. And this is something we hope the Aquino III regime can still learn. If not, then we can expect the pressure for an unscheduled regime change to be in the cards within a year’s time.
(Tune in to Sulo ng Pilipino, Monday, Wednesday and Friday, 6 to 7 p.m. on 1098AM; watch Politics Today with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on “Power Consumers’ Legislative Champions: Reps. Bernadette Herrera and Toby Tiangco,” on Global News Network, Destiny Cable Channel 21; visit our blogs, http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com)
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