GOTCHA By Jarius Bondoc, The Philippine Star. Monday, July 7, 2008
As Typhoon Frank last month battered the Philippines, President Gloria Arroyo took America by storm. To impress, at least $1.5 million was spent on her official train of 73 cabineteers and legislators, and the same amount on personal coterie of 20 maids and bodyguards. At every stop she boasted that the RP economy is soaring, as shown by the 7-percent growth last year. During a $5,000-a-plate dinner in New York she wooed investors with an upbeat presentation on privatization and infrastructure binge.
It all sounded empty to her countrymen, though. More so since, only two weeks before, her top allies in the Senate were singing a different tune. Summoned to the June 6 hearing of the Senate energy committee, the heads of the Joint Foreign Chambers of Commerce were rebuked. Chairwoman Miriam Santiago made sure the investors from the US, Canada, Europe, Japan, Korea, and Australia-New Zealand felt unwelcome. Sen. Juan Ponce Enrile had demanded that they explain why they wrote the President instead of them about their objections to his amendments to the Electric Power Industry Reform Act. When the French spokesman tried to speak, he cut him off repeatedly. “Get out of this country if you can’t live with us,” Enrile snarled. To which Santiago (who later joined the Arroyo entourage) added: “You (foreigners) may not continue. You do not determine what you can say or not say. I determine.” Joker Arroyo punctuated the incident with, “they deserved it.”
The Foreign Chambers’ point would have been easy to grasp, had the senators cared to listen. There was no need to amend the EPIRA in order to bring down electricity costs. All government had to do was implement the law, particularly the provision on open access. That would let big users to buy power from the cheapest retailer of their choice. For that to happen, the state-owned Napocor power producer needs to privatize at least 70 percent of its generators. In fact, it already has sold 48 percent — with “tremendous success and still gaining momentum,” according to multinationals in the Foreign Chambers.
Yet, one of the proposed amendments is to start open access even with only 50-percent privatization. That would leave most of the coal plants, which crank up 32 percent of Luzon’s electricity, still in Napocor hands. Meaning, the Napocor Mafia, coddled by Malacañang and certain congressmen, would continue to take kickbacks from overpriced coal purchases. That certainly is no way to entice foreigners.
The Foreign Chambers, which includes overseas power contractors, would have pointed out another incongruity in the energy sector. The government takes an excessive 40-percent royalty from natural gas and geothermal steam, which fuel 47 percent of electricity needs. Other countries do not tax indigenous fuels used for domestic consumption, but only when exported. If the Philippines follows suit and scraps the royalty, electricity rates could go down by 25 percent.
Supposedly the Foreign Chambers wrote Arroyo and not the Senate because she has been lending them an ear. Maybe so, at least for show. “We don’t sell hype, no quick bucks, no false gains.Just strong fundamentals, good economic stewardship and excellent returns on your investment,” she pitched before the US-Association of Southeast Asian Nations (ASEAN) Business Council in Washington. “We are the smart, prudent place to place your money.”
That too rang hollow for Manila observers. Only four weeks before, Korea’s largest ship maker Hanjin Corp. pulled out from what should have been a $2-billion shipyard in Mindanao. The mayors of the two towns on which the 441-hectare facility would be built, Arroyo allies both, reportedly had been extorting money. Scolded by Arroyo, the two claimed it was the firm’s fault, for attempting to bribe them P400 million in construction subcontracts in exchange for environmental clearances. Malacañang had a police general investigate, that is, whitewash, with a report of no evidence of either extortion or bribery. Hanjin pulled out just the same, and Filipinos lost 40,000 new jobs. Unexplained to this day, though, is why the Koreans and the mayors were bickering over environment permits, when such papers were not yet needed since the area was still being cleared and no structure was rising. Filipinos will never know the whole truth because Malacañang is hiding the news. But they know it’s one of those frequent incidents of foreign investors disillusioned at not getting the fair treatment promised them.
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For the record. In the period 1980-2008, five Sulpicio Lines ships sank, six collided with other vessels, four caught fire, 15 ran aground, and three stalled at sea with passengers for more than three days.
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E-mail:
jariusbondoc@workmail.com
