Disarray

Next to controlling smuggling, diplomacy is the weakest suit of this administration. The deteriorating situation in Kampung Tanduo, Lahad Datu town in Sabah underscores that.

Last week, the Sultanate of Sulu blindsided everybody by sending a couple of hundred armed followers to assert his proprietary claims in Sabah. The presence of troops from the “royal army” of the Sultanate was not an invasion (otherwise that would be completely comical). It was a maneuver intended to highlight the unresolved territorial claims stretching back in history.

For a week, nothing definite in terms of policy guidance emanated from the Palace. No top-level official was deployed to Kuala Lumpur (we have no consulate in Sabah because this could undermine our sovereign claims) to coordinate with Malaysian authorities in the handling of the bizarre incident. No one, it appears, was sent to the court of the Sultan to talk to him about withdrawing the armed force. No diplomat, it seems, was sent to Lahad Datu to mediate on behalf of Filipino citizens who might have put themselves in an unhealthy situation.

The Palace attitude, it seems, was to bury its head in the sand in the hope the problem would go away. In the meantime, we lost precious diplomatic time. In the meantime, the Sultanate had written the Malaysian prime minister asking that talks on the proprietary claims be reopened. The Sultanate eventually wrote the UN secretary-general to request third party assistance.

In the meantime, too, Malaysian authorities established a food blockade around the Tausog armed force. The food blockade was the best alternative to a firefight.

The first really official move the Philippine government undertook was to request Malaysia to extend its deadline by four days. The original deadline was last Friday. The new deadline happens today. What our government did in the interim is not clear.

We will know by sunset if the Sultan’s decision to send a detachment of heavily armed fighters to Sabah was a brilliant move or one of sheer folly. He might have restored the forgotten claim (ignored by the much touted Bangsamoro Framework Agreement) to the top of the agenda or merely provoked a senseless bloodbath.

The latest word has it that the Sultan of Sulu ordered his fighters to stand their ground at Tanduo. If the fighters obey that order, they will be martyrs to the claim.

Meanwhile, we hear nothing from the National Security Adviser, the Foreign Affairs Secretary or the Secretary of National Defense. The President was last heard babbling about his teenage crush for a senator seeking reelection.

There seems to be no sense of urgency at the top — just as there was such a resounding absence of any sense of urgency when that tragic Luneta hostage incident happened. The hair-trigger situation in Kapung Tanduo seems like a nuisance the national leadership devoutly wishes to ignore.

The greater interest in the Palace is to discover which among its factional rivals connived with the Sultan in conjuring up this national embarrassment. Underpinning that Palace attitude is a prejudiced view that Muslim Filipinos can only be stooges manipulated by Manila-based political factions.

Meanwhile, the prospects of the “royal army” and the thousands of Filipinos inhabiting Sabah rapidly deteriorates by the hour. Hard as the Palace might try to ignore it, the situation has now become seriously internationalized.

Cost structure

The Energy Regulatory Commission (ERC) rejected a plan by the Power Sector Assets and Liabilities Management Corporation (PSALM) to collect an additional P65 billion from consumers. Had that plan been approved, electricity bills will be much higher than the already painful increases due this month.

Electricity costs in the Philippines remain the second highest in Asia. This distinction has caused us to endure large economic costs, most prominent being the hollowing out of our manufacturing sector. In the more globalized environment, there is no way energy-intensive domestic manufacturing could compete with cheaper imports from neighboring economies with better-managed energy cost structures.

The withering away of our manufacturing sector is the single biggest cause of high unemployment in our economy. In turn, high unemployment results in higher poverty rates.

The vicious cycle is truly cruel. Even as our economy grows, the poverty profile worsens. The poor households consume less of everything else because of high electricity costs.

Cagayan Rep. Jackie Enrile, who advocates bringing down the electricity price regime, agrees with the ERC rejection of the PSALM plan — but says this is not enough. Since the bloated power costs cause the economy so much harm, Enrile says government should do more. While the PSALM needs to manage the debts incurred in the past by mismanagement of the power generation sector, the task must not compromise future economic growth especially for the poor.

Enrile suggests the share of government from the sale of indigenous energy resources be reduced from the present 60% to only 3%. He points out that government’s share from the sale of natural gas is five to eight times more than the taxes imposed on imported fuels such as coal, oil and liquefied natural gas. This is such an anomalous situation.

If government’s share from indigenous energy resources is reduced, overall electricity costs will decline. When that happens, the poor will be able to reallocate their limited purchasing power to meet other needs, principally food. That reallocation will cause broader, more inclusive economic expansion.

Because power costs plays such a vital role in determining the inclusiveness of our economic growth, Enrile’s proposal deserves a much closer look. It will serve our economy better if government does treat indigenous energy sources as just another revenue cow.