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)
Friday, April 13, 2012
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)
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)
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)
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