Cha-cha

Only two voices seem to be adamantly against any effort to reopen debate on constitutional reform: those of Edwin Lacierda and Abigail Valte.  Together, they have maintained a verbal barrage against those in the legislative branch seeking a way to recast a Charter that has proven to be the single biggest hindrance to our economic development.

Even, as they claim, they speak for their principal, they are still speaking out of turn. Neither Lacierda nor Valte have a role in the formation of national policy. The Congress is an independent branch of government. The institution is within its right to ponder the weighty question of introducing amendments to the basic law of the land. It is not just for the Palace to try to preempt a necessary public debate.

It adds to the injustice that the two Palace mouthpieces offer only the most banal excuses for doing what they do, setting up a verbal roadblock and basically imposing their will tyrannically. Public debate is always the preferred method in democracies. Every avenue for that must be kept open.

Valte has been particularly offensive. She demands, from those who wish to consider constitutional reforms, what urgency there is for doing so.

She must have been living under a rock for the last quarter of a century. From Day One, the 1987 Constitution has been taken to task for “constitutionalizing” economic policy and removing that from the sphere of legislation. Ours is the only constitution that does that. It imposes a rigid, unalterable policy architecture protected from the demands of economic reality by the fact that it can be altered only by altering the basic law itself.

That can never be right.

What makes it even more wrong is that the economic orthodoxy it enshrines has long been abandoned. This medieval orthodoxy does not cohere with the times. It is anachronistic, unrealistic, inflexible and just plain stupid.

The proof stares in the face. Among the emerging Southeast Asian economies, we receive the most miniscule share of direct foreign investments. In the first quarter of this year, we suffered from a net investment outflow, a phenomenon that heretofore happens only in failed states. Our industry has hollowed out. We could not meet out energy needs. A third of our people are unemployed while ten million Filipinos are forced to work abroad. Our agriculture is dead in the water. Our infra gap widens by the day.

What other reason does Valte need to open her mind to the possibility that our constitutional framework is deficient. It has failed to ensure the best conditions for the prosperity of our people.

Valte, with her eyebrows raised as usual, smugly declares: This is not the right time to do constitutional reform. If so, when might be the right time? What is wrong with this time?

When do we reinvent the economic policy framework, when unemployment doubles its already high rate? When the poverty rates rises even more? Where income inequality worsens from its already oppressive trend?

Fortunately, House Speaker Feliciano Belmonte Jr. chose to do what is right despite the posturing of Lacierda and Valte. He filed House Resolution 1 calling on the two chambers of Congress to introduce a single phrase as amendment to the Charter. That single phrase will open economic policymaking to legislation and remove it from the basic law itself.

That is how constitutions ought to be. Economic policymaking should be left to elected representatives of the people to fashion according to the demands of the time.

Oversupply

The power situation in Mindanao is a textbook case for weak planning capacity. From a serious shortage in generating capacity today, we will likely have a serious oversupply by 2016.

We know the reason for the shortage that has taken a heavy toll on the island’s economy the past three years, foreclosing opportunities for growth and driving away investments. For too long, the island relied on highly subsidized government hydroelectric plants selling way below realistic rates. The cheap energy had its underside: it discouraged private investments in power generation leading to the present shortage and the rotating outages that implied.

In the face of the power crisis gripping the island, government shifted policy. Power rates will be allowed to rise to levels that will make investments in new capacity viable. In turn, this policy shift invited a rush of investments in new capacity.

To be sure, Mindanao will still have a power deficit this year. From 2014 onwards, however, the new plants put up by Therma South, San Miguel, Filinvest, Conal and GNPower will come onstream, They will close the gap quickly and create excess capacity. By late 2016 or 2017, it is estimated that Mindanao will have 2800mw of available power. Electricity demand in the island, however, is expected to rise to only 1500mw by that time.

Because of the anticipated power glut three years down the road, the power investors have taken to bribing the boards of electric cooperatives all over the island to nail down forward supply contracts. Competition for power sales will be stiff and the power investors are not beyond using all sorts of enticement to capture their share of the market.

Those enticements, however, will eventually reflect on power prices. The consumers will eventually shoulder the underhanded tactics employed by some of the power investors. The balance will shift to the electric cooperatives who retail the power.

The impending glut signals a failure in planning. Too much new capacity will come online too soon. It will produce an electricity price situation that is nearly as unhealthy as the present condition of shortage.