We survived martial law, we will survive this Lopez

MANILA, Philippines – As the Lopez business empire struggles to fight off corporate and political attacks, its head has assured stockholders that it will survive the crisis just as it survived martial law.

Oscar Lopez, chairman and chief executive officer of First Philippine Holdings Corp., gave the assurance in a speech before stockholders on Tuesday at the Meralco Theater.

“What is happening today is not something that is new to me or to the Lopez family. It happens with predictable regularity in various degrees of intensity whenever there are things that are greatly wrong in the country,” he said.  “It first happened in the years immediately before martial law, when Meralco was also the principal target and when we were portrayed as the oligarchic enemies of society. It is happening again today. We survived the martial law dictatorship. We will survive this one, too.”

The Lopez group, particularly the Manila Electric Co., is under fire from administration officials for allegedly overcharging customers. Government Service Insurance System (GSIS) president Winston Garcia earlier demanded to see the financial records of the country’s largest power distributor and called for a management change in Meralco.

Garcia’s move sparked speculation of a government takeover of Meralco. GSIS holds a sizeable share in Meralco.

In his speech, Lopez said the government is using the electricity rates issue as “diversionary scapegoat in order to deflect attention away from the many problems and issues that our people face, and on which their leaders have failed them utterly.”

“The attacks have been vicious, both those that have come openly, and those that have come under cover of anonymity. Most have been against Meralco, but some have also been against our other corporations,” he said.     

“Ultimately, they are against the Lopez family and our family’s ownership and management stake in our businesses. Partly in reprisal for the dogged determination shown by ABS-CBN in its crusade to expose the truth of our everyday lives, the good as well as the rotten,” Lopez pointed out.

Lopez made a point-by-point rebuttal of claims against the group, including accusations that it was involved in “self-dealing” when its Philippine Electric Corp. sells transformers to Meralco.

“Philec dominates the local market for utility and industrial transformers because it offers the lowest price, the highest quality and the best value-added services that no manufacturer, domestic or foreign, can match,” he said.

“We are proud to own Philec. We are proud of the fact that Philec is a competitive manufacturer. We are proud of the fact that Philec provides employment to Filipinos. We are proud of the fact that our transformers are made by Filipinos,” he said. 

He also denied accusations of “ghost deliveries” involving First Gas. “When First Gas charged Meralco for capacity fees for 1,000 megawatts during the second half of the year 2000, this was because 1,000 megawatts was available for dispatch,” he said.

“Did First Gas request to be dispatched higher? The answer is yes and there is official documentation to support this. Was First Gas dispatched higher? The answer is no. And why was this? Because Napocor’s transmission line projects, the ones they had committed would be ready by the time the First Gas plants were ready to operate, were in fact delayed by five years. Yes, five whole years!” Lopez said.

“A default by Meralco would have led to a default by First Gas and this, in turn, could also have led to a default on the set of agreements and covenants by which the Camago Malampaya gas fields were developed and made commercial,” he said. 

“Plowing through evidence can be tedious and tiresome. Its sole reward is the truth. And often, the truth does not make for good sound bytes,” he said.

“We continue to believe in the underlying potential of Meralco, by far the country’s largest utility, to serve its customers’ needs, and to do so as an efficiently-run, privately-owned enterprise, generating a good return on capital within the bounds permitted by law,” he said. “However, Meralco as a company, because of the vital function it serves for a large base of consumers, is very politicized and is an attractive and frequent target for those wishing to acquire or embellish a populist image.”