Betrayal

Seduced by populism, our lawmakers are about to wreak havoc on the private schools that educate half our students.

A bill outlawing the “No Permit, No Exam” policy has now reached the bicameral committee level. The politicians pushing this bill are looking at the brownie points they might earn among voters rather than at reviving the schools badly hit by the pandemic. Tens of thousands of students could lose their schools as a consequence.

Since the pandemic struck, an estimated 200 private education institutions closed down. If this unenlightened bill becomes law, hundreds more could shut down.

An educational institution carries fixed costs, such as teacher payrolls and electricity bills. By prohibiting the last instrument the schools have to achieve certainty in revenues, the schools lose their viability as enterprises.

Lest we forget, our public schools system cannot possibly meet the demand. It lacks tens of thousands of classrooms and many more teachers. The educational system needs the private institutions to meet the demand. Over the past four years, at the tertiary level, private schools produced more graduates than the public colleges and universities.

Private schools are partners in the educational enterprise. Without them, half our student population will be out of schools. But our politicians are treating them as enemies. The bill sitting at the bicameral conference committee will be an act of betrayal against private education.

To begin with, the bill is superfluous. Department of Education Order No. 15 Series of 2010 already provides a mechanism for students facing financial challenges. It allows schools to offer installment plans and accept deferred payments. No need, therefore, for the law our politicians want to pass in aid of reelection.

The National Alliance of Private Schools urged legislators to consider adopting more balanced and practical approaches promoting a synergy between public and private schools. Dr. Antonio M. del Carmen, president of the Federation of Associations of Private School Administrators (FAPSA), observes that the proposed law “stands to destabilize the very infrastructure that supports” our students. The proposed law would disrupt fee collection and jeopardize operational sustainability, putting in jeopardy the timely payment of salaries for teachers.

The “pro-student” guise of the proposed law is most deceptive. Its practical effect will be to torpedo the private school system.

All the private educational institutions are demanding to be heard on this urgent issue that adversely impacts the viability of private education in the country. Good luck with that. Populism, it has been shown, causes hearing impairment.

Aggregate

In less than two decades, our country’s energy demand is expected to rise four-fold. It will not be until 2050 that we will be able to increase our renewable energy to half of the total energy mix. In the interim, we have to evolve a more efficient way for ensuring we could import the fuel sources and maintain energy security.

A major component of our effort to wean away from pollutive oil and coal, we have increased our use of natural gas. However, the limited output from the Malampaya field and our inability to develop new fields means that we will begin importing more and more liquefied natural gas (LNG) to meet our rising energy demand.

In his second SONA, President Marcos Jr. observed that improved use of natural gas is the key to maintaining economic stability and ensuring growth. But here, he admits, “we have work to do.”

At the moment, we have a pretty chaotic system for sourcing our LNG supplies. Each gas plant sources LNG independent of the others. For the most part, our gas plants run to the nearest available supplier. This is subject to nearly constant uncertainty. As a result, our energy prices have been volatile and our energy costs have been higher than they might be if we had a more efficient supply system.

Responding to the situation, Enrique Razon’s Prime Infra (the outfit that operates the Malampaya field) presented to the President a proposal to aggregate our LNG importation. Aggregation means that all our gas plants form a buying bloc based on current gas usage.

Call it a buyer’s cartel, if you wish – like OPEC is a cartel of producers cooperating to ensure stable price levels. By bundling our importation, we could negotiate for lower prices and secure long-term supplies. If we get lower imported gas prices, this will translate into lower energy costs for the consumer. It will reduce the level of uncertainty in our economy – such as when gas-powered plants shut down because they have run out of fuel.

This framework, as Prime Infra CEO Guillaume Lucci described it, “establishes a resilient and efficient natural gas supply chain.” Since LNG has one of the most volatile commodity prices, Energy Secretary Popo Lotilla observes that by blending lower priced Malampaya gas with imported LNG, we could help smooth out the volatilities.

The aggregation of our LNG importation requires no rocket science. It is a common sense strategy for getting secure supplies at lowest possible prices. A buyer’s cartel will have more market clout than several gas plants buying their supplies independently (and randomly).

While the aggregation of our LNG importation is a simple solution to volatility, its infrastructure requirements might be a little more complex. We need to build the facilities to store imported LNG in larger quantities. Here, the industry might require some government support.

President Marcos saw the benefits to be gained from the Prime Infra proposal. It will clearly bring greater efficiency to our energy industry.