Has the Palace forgotten

For some time now, we’ve been puzzled with the frequency of attacks and threats towards Meralco and the rest of the private energy sector, all seemingly mounted by people close to and even within both the National Power Corp. (Napocor) and Malacañang.

In quick succession, there was the expose’ on Meralco’s supposed P42-billion debt to Napocor and the bright idea of taking over the power distribution firm by converting the alleged debt into equity.

This was soon followed by the announcement that President Arroyo signed EO 474 creating the Philippine Strategic Oil, Gas, Energy Resources and Power Infrastructure Office (PSOGERPIO) to "promote, assist and fast-track crucial private sector led oil, gas, energy resources, power and other energy projects to avert the fast approaching energy crisis," an order that drew so much flak from the President’s own advisers and allies that it was later withdrawn supposedly due to "procedural lapses".

A week later, a "professional informer," as described by BIR Commissioner Buñag, filed a mind-boggling but flawed P85-billion tax evasion case against Meralco. Then again later, despite announcements of its withdrawal, there is evidence of efforts to continue pursuing the revival of EO474.

But it all started to fall into place when yet another expose’ in another daily unveiled the objective of these efforts – to mold public perception and generate favorable public consent towards the "take-over" of Meralco.

To get a better picture of what is happening, we need to step back from the proverbial trees to get a better view of the entire forest. And instantly, the entire picture becomes clear.

With public dissatisfaction towards the administration continuing to rise, it is widely believed that the first half of 2006 is a critical time for the presidency. And the Palace has been moving to neutralize the impending avalanche of public discontent knowing that all their political allies will be preoccupied with the election campaign trail by second half of 2006.

That public discontent will be brought about by the increases in oil and petroleum products (Oil companies have started to increase pump prices and LPG marketers have already given notice of a planned increase of P2 per kg of the precious cooking fuel.).

The country is also facing higher electricity rates that Napocor will have to charge Filipinos as soon as government totally lifts all subsidies and the ERC allows Napocor to charge actual generation rates, a pre-requisite to privatization. Then there is the 12-percent EVAT which kicks in today and will increase the retail prices of just about everything.

And the mother of all Palace headaches for the year, the revival of the impeachment complaint which has been left unanswered and still questions the President’s legitimacy.

Faced with horrendously deteriorating popularity, a Palace insider recently revealed that in order to fortify her foothold on the presidency, the Palace would take over Meralco and then artificially reduce power rates. The move is intended to win the hearts and minds of the masses and businessmen, the same way it did prior to the 2004 elections. And it now becomes clear that PSOGERPIO was created to spearhead the Palace’s move to make Meralco another Napocor and place it under state-control.

But none of the bright boys in the Palace seem to realize that they’re training their guns on the wrong entity and trying to protect the real cause of their bigger problems.

We already know that far more than two thirds of the government’s total deficit is attributed to the mismanaged Napocor. This is one of the major reasons why the EPIRA, the law mandating the privatization of Napocor was passed. And it called for the privatization of at least 70 percent of all Napocor assets by the end of 2004.

As of the end of 2005, it turns out that only three percent of Napocor has actually been privatized and not 11 percent as what was being bandied around by government.

During a recent joint legislative investigating committee session, Napocor and PSALM officials admitted the eight percent difference was represented by the still to be completed Masinloc deal. An unusual transaction that has both PSALM and winning bidder YNN Pacific accommodating each others technical moves to further delay completion of the sale, but that’s a totally different story altogether.

By the end of 2006, Napocor debt will have grown, based on Napocor and PSALM’s own press announcements, to at least $10.4 billion. That’s $9.1 billion as of end 2004, another $600 million in new debt was acquired in 2005 and an additional $700 million is planned in 2006.

And what has the Palace done to staunch the bleeding? Evidently nothing... yet.

Surprisingly, rather than addressing the disease which is Napocor, the government has instead manifested moves and intentions towards spreading the disease – by taking over Meralco after successfully mismanaging Napocor.

Has the Palace forgotten that the mandate of EPIRA to privatize 70 percent of Napocor by the end of 2004 was not met by Napocor nor PSALM?

Has the Palace forgotten the following:

• that Napocor’s debts continue to grow each day its privatization is delayed?

• that by the end of 2006, and only because its privatization has delayed, Napocor will have racked up another P69 billion worth of foreign debt since 2004?

• that it already has absorbed more that P200 billion of Napocor’s debts and passed that burden over to us lowly tax payers that had nothing to do with the ineptness of the government officials and people running the power generating behemoth?

• that the expected deterioration in presidential popularity will be due to the increase in prices of all products and services once the 12 percent EVAT takes effect?

• that the EVAT was passed because of the burden that is Napocor and for no other reason?

• that it has promised to institute reforms that would bring progress and not cause us to regress?

Indeed, the Palace and other officials in government seem to have forgotten.

For comments, e-mail at [email protected]