Meralco railroad

CROSSINGS
Butch Junia
6/27-7/3/2011



Meralco was Manila Electric Railroad and Light Co. at the time when it operated the tranvia in old Manila in 1904, and it may well be back in the railroad business today, unless stopped by Mang Naro Lualhati.

On June 6, 2011, the Energy Regulatory Commission (ERC) issued its Decision on Meralco’s application for annual rate increases over the next four years, a copy of which was received by Mang Naro on June 21, 2011. He gets those copies as Intervenor in that Meralco application.

While working on his action to junk ERC’s decision, he got Meralco’s Motion for Extension of Time dated June 13, 2011.

Way to Fleece Customers
Apparently, on the day ERC approved Meralco’s application, it also ordered Meralco to file its translation of the Maximum Average Price (MAP) into a Distribution Rate Structure.

Immediately, Mang Naro protested the railroading of Meralco’s rates, saying he would file a Motion for Reconsideration “especially because the correct MAP for 2012-2015 is P0.80 pkwh and not P1.5828 pkwh as approved by the Commission.”

For the benefit of those who may be hearing this ERC mumbo jumbo for the first time, these are all related to the so-called Performance Based Regulation (PBR) instituted by ERC to give the utilities like Meralco more ways to fleece their captive customers like us.

No Bearing
Under PBR, utilities file their Annual Revenue Requirement (ARR) and Performance Incentive Scheme (PIS) over four years under a so-called a Regulatory Period.

Projected sales, forecasted expenses and capital outlays, returns and depreciation are become the bases for the rate.

The process is initiated by the ERC putting out an issue paper that tells the utility what it needs to tell ERC to get an increase or change in its rates. This will be the basis for the ARR/PIS.

From the ARR/PIS, ERC comes up with a Draft Determination on the application, although ERC is quite emphatic in saying that that determination has no bearing on the rate. This is subjected to comment and public consultation.

Subsequently, ERC arrives at a Final Determination, which will be the basis for the Distribution Rate Structure that will now show how much higher the residential customers consuming more than 400 kwh per month will pay, probably in the range well over P3.00/kwh, compared to large customers who may be paying P0.39/kwh, or even less.

Entirely the Basis
What ERC issued on June 6 is a Final Determination, and what Meralco will just do is to file the rate translation, which in turn will be the basis for the annual rate reset.

With the order for Meralco to file the rate translation even before the intervenors could comment on the Final Determination, it looks like we have a run-away train. But they will not get away with it that easy with Mang Naro weighing in with his motion for reconsideration.

I know how he arrived at the P0.80/kwh MAP, and ERC will not be able to just brush him aside this time.

On the Capital Expense claims of Meralco alone, the numbers are already P35 Billion apart for the whole regulatory period, over P9.0 Billion for the first year only.

He is also questioning the Regulatory Asset Base which, according to the Meralco witness, is only half-utilized but which is entirely the basis for the P19 Billion return on capital.

Even the 14.49% Weighted Average Cost of Capital (WACC) is being challenged by Mang Naro, who says that should not be more than 12%.

Conflicts of Interest
Other than those questions from Mang Naro, I have also done my own read of the decision and determinations, and there are many things ERC will have to explain, like the valuation of assets and the failure of Meralco to sufficiently explain questioned items, yet these were allowed by ERC.

We also will want to know how ERC and/or Meralco picked their so-called rate reset experts and consultants.

Their costs must ruin into hundreds of millions, thus we must make sure that they have the credentials.

We also need look into possible conflicts of interest, because one or the other consultant or expert could have been working both sides of the track – with both the regulator and the regulated.

Shouldn’t we have any rules on this?

A Battle Royale
This promises to be a battle royale between Mang Naro, ERC and Meralco, and with more individuals and groups taking renewed interest in power issues, this is one fight to look forward to.

PBR has to be revisited and subjected to more rigorous review, and the Meralco 3rd Regulatory Period application is the perfect context for assessing what’s wrong with the industry and exploring the right remedies.

Mang Naro & the RH Bill
I yield the rest of this week’s Crossings to Mang Naro’s stand on the RH bill. I found out, to no surprise, that our stand on RH bill run along the same lines.

Here’s Mang Naro, who pointedly says: The RH Bill is Foolish.

“Economics does not agree with the proposition that overpopulation is the cause of poverty and that condoms and pills are the solution to hunger of the marginalized as propounded by the RH Bill.

Robert Malthus, an English Economist published in 1798 an Essay on the Principle of
Population also believed that “population constantly grows to outstrip the means of subsistence”- hence poverty would result from overpopulation.

Productivity, Education
But records of the wealthy nations led by the United States, France, England, Germany, China and Japan tell us that the poverty results not from overpopulation but underproductivity and the solution is not birth control and condoms and pills but mechanization or industrialization – in short, productivity.

Now we are certain of this because we saw that when these nations developed into capitalistic economies they push their productivities to yet unknown levels that even absorbed the idle hands in the farms, resulting in leveling of the distribution of wealth.

Even simple common sense shows us that poverty is not solved by condoms and pills but by increased productivity and better quality of life by education.

Yet, perhaps the strongest reason against the RH Bill to have the government to purchase the condoms and pills for distribution free to solve poverty is the undeniable truth that population grows at a geometric rate whereas birth control works at the much slower arithmetical rate. Hence, no amount of condom funding can ever solve poverty.

Geometric Growth
It is simply IMPOSSIBLE because population growth is GEOMETRIC and under-productivity is the cause of poverty and not overpopulation.

Illustration of birth control futility: geometric population growth – 1-2-4-8-16-32; arithmetical population growth – 1-2-3-4-5-6------

Thus, it is impossible to solve poverty with condoms/pills.

So why spend millions of pesos foolishly? Why throw money away and be the laughing stock of the world, distributing free condoms/pills instead of rice and jobs – and more? So, there you have Mang Naro, as passionate with RH as with Meralco.

Sorry. A couple of my lapses in last CROSSINGS: “several times over” came out several times “Ever”, somehow changing the tone of what I was saying. Uriel Borja is an “owner of a utility in Mindanao”, not Minadano.

• Email crsng_47@hotmail.com

A sad 1st birthday for an incorrigible haciendero

YESTERDAY, TODAY & TOMORROW
Linggoy Alcuaz
6/27-7/3/2011




Last week, on the eve of his Administration’s first Birthday, P-Noy displayed his penchant for shooting himself and his administration between the legs. He spoke at the Anniversary (113^th?) of the Department of Public Works and Highways.

As is his work and speaking style, he descended to petty “divide and conquer” tactics.

He publicly expressed his disappointment and displeasure at not only one, but three cabinet secretaries. He did not mention their names or departments.

He did mention three secretaries that he is pleased with, namely: the host, DPWH’s Rogelio “Babes” Singson; Department of Science and Technology’s Secretary Mario Montejo, and, of course, Department of Budget and Management’s Abad Patriarch, Florencio “Butch” Abad.

The extremely insecure P-Noy
A distant relative of the Aquinos explained to me why factions persist and continue to publicly exercise their turf-grabbing tantrums in the Aquino Administration.

Unlike his mother, Cory, who used to put her foot down on public displays of factionalism, the son encourages them.

The reason for this is his extreme case of insecurity.

The major causes of the President’s insecurity are:

1. His ancestors include World War II Japanese Collaborator,  Secretary of Interior Benigno Aquino, Sr. and turn-of-the-century (19^th to 20^th centuries) Gen. Antonio Luna’s special friend, Doňa Isidra Cojuangco.
2. His father and mother are Senator and Hero Benigno “Ninoy” Aquino, Jr. and President Corazon “Cory” Sumulong Cojuangco Aquino.
3. Ninoy was incarcerated for more than eight years (1972-1980). He was charged, tried by a military court, convicted and sentenced to death by musketry. However, when his health deteriorated and he required a heart by-pass, he was allowed to go to the United States and lived in exile in Boston for three and a half years. When he came home on Sunday, August 21, 1983, he was assassinated at the Manila International Airport (now Ninoy Aquino International Airport I).
4. Ninoy’s widow and Noynoy’s mother, Cory, became the symbolic leader of the opposition. She ran against Marcos in the Friday, February 7, Snap Elections. She won but was cheated. On Sunday. February 16, 1986, at the biggest ever Opposition Rally at the Luneta. She called for a Boycott of Crony Corporations. The February 22-25 People Power Revolution, known also as EDSA I, installed her as the President of a Revolutionary Government.  For the next six and a half years, she was the target of numerous coup attempts and plots. It was in the August 27, 1987 RAM coup that Noynoy was ambushed and wounded at J. P. Laurel St.
5. Cory was the daughter of the Cojuangcos, rice and sugar Landlords of Paniqui, Tarlac and Hacienda Luisita. However, she studied at the St. Scholastica’s College at the Grade and High School levels and went abroad for her college degree. Considering the connections, experience and wealth of the Aquino, Cojuangco and Sumulong Families, a very worthwhile investment they could have made was to send Noynoy for studies abroad instead of depending almost entirely on the Jesuits. It is virtually a matter of principle that children of royalty have to be weaned from their small circles of family and friends and sent to boarding schools.

What is there to celebrate?
On Thursday, June 30, the Second Aquino Administration will be harping on whatever reasons it can find to celebrate its first Anniversary or Birthday. Certainly, we can find many more reasons why it should not celebrate:

• The aborted take-off of the Centerpiece of the Anti-Corruption Campaign (The Truth Commission created by Executive Order # 1, was struck down by the Supreme Court.), allowed prosecution of the sins of the past to appear like the persecution of political enemies.
• The series of “urong-sulong” memorandum orders regarding government officials and employees who were neither CESO nor Career Civil Service, exposed the OJT (On-the-Job Training) and Student Council level and quality of P-Noy’s Cabinet and top officials.
• The revelation that the “Matuwid na Daan” and “Walang Mahirap pag Walang Korap!” advocate, P-Noy, tolerated or had even assigned a “Kabarilan” crony USec Rico Puno, to take over the Jueteng Payola, pulled the rug from under the high moral ground on which P-Noy initially stood.
• The August 23 Luneta Hostage Tragedy opened the Pandora ’s Box and exposed the can of worms that the Aquino Administration was made up of. In just his second month in office, P-Noy underwent his biggest and worst international embarrassment.
• P-Noy’s trip to the US was way below par. We cannot recall any accomplishment of substance. We remember P-Noy’s salivating for Boston Pizza, New York Hotdogs, and Sun Valley computer games. To cap his first foreign foray, the Philippine Flag was displayed inverted, signifying war, at one of his formal multilateral activities.
• The Aquino Administration was also below par in its handling of Overseas Filipino Workers caught in the civil strife in Africa and the Middle East.
• In the case of the three Filipinos executed in the PRC, Vice President Binay’s “Never Say Die!” endeared him to his countrymen while P-Noy was perceived as having folded up already.
• Thus, Binay beat P-Noy in the SWS and Pulse Asia survey ratings.
• Meanwhile DOTC Assistant Secretary for LTO Virginia Torres’ intervention in the internal intra-corporate conflict of Stradcom, triggered a management crisis in P-Noy’s Administration that will continue to play out. P-Noy’s coddling of his favorite KKK’s was exposed by House Minority Floor Leader Edcel Lagman.
• The resignation of DOTC Secretary Jose “Ping” de Jesus combined with a few more mistakes may lead to the start of erosion of business confidence. As in the case of last week’s public sideswipe against three Cabinet secretaries, P-Noy did a blind item on Ping de Jesus during his arrival (from Brunei) speech at the NAIA, the Friday night before the Monday, May 30, when Ping submitted his resignation.
• P-Noy’s visit last week to Cotabato was a super “kapalpakan”. His “Mother of All Sins of Omissions”. It degenerated into name calling between Malacaňang and the Cotabato City Mayor Japal Guiani.

Lame duck before one
Usually, a President may turn into a political lameduck towards the end of his term.

P-Noy is the opposite. He turned into a lame duck before his administration turned one year old.

As we pointed out last week, out of 15 Filipino Presidents, P-Noy belongs to a subgroup composed of General Emilio Aguinaldo, President Sergio Osmeňa, Sr., and Dr. Jose P Laurel.

What they hold in common is that they became political lame ducks early in their terms.

During a President’s term, his popularity, satisfaction and trust ratings as gleaned by poll surveys, may go up and down.

In P-Noy’s case, three Social Weather Stations (SWS) Quarterly Surveys in November, March and June have revealed a consistent drop in Net Satisfaction Ratings from 64 % to 51 % to 46 %.

War is popular
The same thing happened to President Joseph Estrada in his second year in office.

His survey ratings fell for three consecutive quarters, the third and fourth quarters of 1999 and the first quarter of 2000.

When this was happening, Dr. Felipe Miranda of Pulse Asia and formerly of SWS explained that based on the history of surveys of Filipino Presidents, such a trend could be fatal.

However, on April 29, 2000, armed clashes broke out between the AFP and the MILF.

Then, President Estrada decided to pursue an all out war versus the MILF. In three or four months, the AFP captured all the MILF camps.

An additional P1.4 billion was spent, which is roughly 1% of the total of the current National Budget.
The All-Out War had two by products.

First, President Estrada’s falling survey ratings suddenly went up.

Second, both Uncle Sam and the Catholic Church tried to persuade Erap to stop the War. He refused both requests. In turn the US, the Catholic Church, and Filipino Politicians and Activist conspired to oust him.

Perhaps, P-Noy learned a lesson from these. He has to pull up and get out of the dive in survey ratings. He has to make sure that a conspiracy does not reach a critical mass and succeed in ousting him.

Toothpick rattling
Thus, he engages in a little “toothpick” rattling against the People’ Republic of China.

He also goes out of his way in pleasing Uncle Sam.

A few Saturdays ago, he preferred to visit the US Aircraft Carrier Carl Vinson (that served as the funeral hearse of Osama Bin Laden) than receive boxing champion Manny Pacquiao.

However, the MILF that Erap defeated is a far cry from the People’s Republic of China. Maybe, our President is acting as though he is still a manager at Hacienda Luisita.

US: RP's worst 'best friend'

DIE HARD III
Herman Tiu Laurel
6/27/2011



A cacophony of voices ranting and raving about what to do in response to a rival claimant’s presence in certain areas of the South China Sea can be heard these days. If these big and loud words only came from credible voices, I would stand up and take heed. But knowing the empty record of many of these bellows of bellicosity, including that young trapo Joey Salceda, who issued that silly boycott call, or the man often dubbed “De Cash-tro” for his perceived chauvinism and underhanded “journalism,” patriotic and nationalist rhetoric just become jingoist and vacuous.

It’s also hard to take seriously what Malacañang’s spinmasters are doing of late, such as recasting their president as a patriot or renaming as the “West Philippine Sea” what has been marked in the World Atlas for thousands of years as the “South China Sea.” Such pompous acts can hardly qualify as “patriotic” given that Philippine officialdom has completely ignored the nation’s enslavement to the US-IMF in its growing annual debt service of P800 billion, which continues to bedevil our finances, economy, and military defense capabilities.

Unwilling to tackle such real fundamental issues as resolving the debilitating 50-year national debt trap, those bellicose voices have instead turned to grasping at one of the flimsiest straws — RP’s so-called “alliance” with the United States of America.

If our history with that North American country were to be the gauge for it, then the Philippines is absolutely doomed. The US committed its first international betrayal of the budding Philippine nation when it stole our forefathers’ victory against their 400-year colonial master Spain and established its own colonialism after killing a million Filipinos, including a hundred thousand or so in the island of Samar.

Then, in the Second World War, the US sacrificed the Philippines to concentrate on the European theater of war and then staged a dramatic return by destroying it. History, as everyone should know, cites Manila as the second most devastated city in the world in that war (beaten only by Warsaw).

This was what Thomas Huber in his The Battle of Manila said of the military option that could have avoided Manila’s devastation: “Lieutenant General Walter Krueger, commander of the US 6th Army, apparently believed that Manila was not a genuine center of gravity and planned to bypass it. Krueger, whose force landed on the beaches of Lingayen Gulf on Jan. 27 1945, also favored delaying any attack on Manila until he could build up his assets and consolidate his position on the Lingayen coast.”

Instead, the vainglorious American Centurion, Gen. Douglas MacArthur, prepared a victory parade that was frustrated by a Japanese naval commander with 17,000 men defying Yamashita’s order to evacuate Manila; for this or other reasons MacArthur ordered the attack on Manila, pulverizing 80 percent of its structures and killing 100,000 of its civilians. It was a retired Filipino Army general who reminded me of this historical fact, as a pointed reaction to all the media hype on the Philippines ’ reliance on US military support.

Another retired Air Force general stated how everybody is going about it the wrong way, by expecting the US to come to the Philippines’ aid in the event of a clash with China. What he said is that the Philippines must learn to go it alone if it really wants to stand up for its territorial interests. He kept repeating that we must act as “THE Philippines ,” i.e. as one nation preparing for its defense even by its lonesome. And that only means rebuilding our economy, our industrial infrastructure, and our defense capabilities.

When I proposed that the country should first rid itself of over 250 trapos in Congress who eat up all our budgets, everyone agreed. Indeed, how can we prepare ourselves when half the national resources are eaten up by debt service and the rest by corruption?

Alas, little prepared me for the shock — in light of what the retired army general and our history books say of the US’ military record — upon reading Teddy “Boy” Locsin’s opinion piece in BusinessMirror last June 23 entitled, “Bring back the US bases and their nukes, Part I.” But this is precisely the attitude that the retired Air Force general scoffed at — dependence on external support while eschewing the primordial task of building the nation, its identity, its national spirit, its sense of purpose, unity and sacrifice.

Given what we know already of the US military and political establishments’ propensity to sacrifice all others to protect its own, in a nuclear conflict scenario, it will deliberately set up the Philippines as a key ballistic magnet for China’s first strikes against any forward attack facilities of the US. It’s going to be a repeat of the destruction of Manila but on a national scale, with radioactive damage dwarfing the Nagasaki and Hiroshima, Chernobyl, and Fukushima nuclear disasters combined.

We must take a position against involving foreign countries in our national struggles — the way belligerent Vietnam is doing or by way of Thailand’s use of tact and diplomacy (as it did in World War II and the Vietnam War).

If the Philippines can’t go it alone in standing up for its territorial sovereignty, then we’re a hopeless case. No external power will respect us enough to give us serious support except for opportunistic purposes, which will be useless and ultimately harmful to all Filipinos.

In the middle of the last century, some of our countrymen mistakenly thought of latching on to the Japanese imperial forces to eject US colonialism. In fact, Benigno Aquino III’s grandfather led the Kalibapi while his grandmother headed its women’s bureau. How ironic it is that the grandson now thinks he can use the country’s neocolonial ties to the US to rebuff China’s persistent territorial claims. He obviously doesn’t know that he wins nothing but only loses more for the nation in the end.

(Tune in to Radyo OpinYon, Monday to Friday, 5 to 6 p.m., and Sulo ng Pilipino, Monday, Wednesday, and Friday, 6 to 7 p.m. on 1098AM; Talk News TV with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable Channel 8, on “Crushing Coconut Farmers’ Hopes”; visit http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com for our articles plus TV and radio archives)