It is not about ownership, says GSIS chief Winston Garcia. It is all about transparency and proper governance of Meralco.
Rumors had spread this week that the GSIS was about to wrest ownership of the electric utility. Some politicians talked about the possible re-nationalization of Meralco. That proposition seems far-fetched considering the GSIS and the SSS are private funds and government has maintained a clear policy on the privatization of the energy sector.
The GSIS, SSS, Landbank, Philhealth and the Pag-ibig Fund altogether control a 33 percent stake in Meralco. The Lopez group controls a 33.4 percent stake and basically runs the electricity distribution company. The rest of the corporation’s stocks are traded in the market and owned by small shareholders.
Meralco owes the National Power Corporation some P54 billion for past power purchases, an amount much larger than the company’s assets. The company also owes consumers several billions in refunds arising from a previous Supreme Court ruling on overcharging of consumers.
Enjoying a natural monopoly over the distribution of electricity in the National Capital Region and several surrounding provinces, Meralco is imbued with public interest. It holds such a strategic position in the life of the economy that, when martial rule was proclaimed in 1972, the company was nationalized. The move was also interpreted by the Marcos government as a measure against the oligarchy that controlled the national economy.
After the 1986 Edsa Uprising, the Aquino government returned the company to the Lopezes. The decision, along with the return to the Lopezes of the ABS-CBN network, was a controversial one. Critics said the public investments in the two companies during the period they were under government control were not properly accounted for in the outright return.
Whatever issues there were about the outright return of the two strategic companies to a family with a record of using them to win profitable political concessions were snowed under in the euphoria that followed in the wake of the dictatorship’s ouster. It was accepted as part of the process of restituting the victims of the Marcos regime’s excesses.
With electricity prices now lopping off a substantial part of the disposable incomes of its consumers, on top of rising fuel and food prices, the efficiency by which the distribution monopoly is run again comes under close scrutiny.
Garcia has now assumed the role of public crusader for greater transparency in the manner Meralco is being run. He complains that the four GSIS members in Meralco’s 11-man board of directors are less than fully informed of the management of the company. They are routinely denied documents they ask for and, according to Garcia, treated like rags.
Garcia strongly hints at mismanagement in Meralco. He says the incident of overpricing that required a ruling by the Supreme Court to correct was just the tip of the iceberg.
He cites as “another instance of corporate mischief” Meralco’s acquisition of an insurance company from which the company used to buy insurance. The purchase of insurance from this company is, according to Garcia, highly dubious.
The insurance company in question reinsures Meralco with a Bahamas-based insurance firm which in turn reinsures with a Philippine-based company. Garcia, on behalf of the stakeholders he represents, wants full information on the matter. He has not been granted that benefit.
This is all very strange, indeed.
Members of the board of directors exercise proprietary control of a company. They are supposed to be fully informed of every detail in the running of a company. It should be deemed highly irregular for members of a corporate board of directors to be denied information. Especially pieces of information they specifically request for.
If, as Garcia says, the GSIS members of the Meralco board are being denied information, that should be sufficient cause to ring some alarm bells.
The Lopez group does not own Meralco. They run it on behalf of all the other stakeholders. To continue doing so, they should daily earn the trust of all the other stakeholders in the operation of this firm, including the millions of consumers who pay for what they want to be sure are fair billings.
Yet, instead of getting clear answers to his disturbing questions, Garcia was swamped with a misinformation campaign. His demand for transparency in corporate governance was smeared as signaling a government take-over of the utilities firm.
To begin with, Garcia is not managing government funds. He is managing the funds of millions of pensioners who expect those funds to be invested well.
There is no point in government acquiring Meralco, although it has an interest in seeing the distribution firm settle its accounts with the publicly-owed National Power Corporation. But the public has an interest in seeing Meralco run as efficiently as possible so that unnecessary costs are not inflicted on the suffering consumers. Especially costs accrued from what Garcia calls “shenanigans.”
Those who have made a cottage industry of demanding transparency from government and routinely condemn the national leadership for lacking commitment to truth should spare some of their time and demand the same standards of accountability from those who run the electricity distribution monopoly.