With low exports, peso may sink to P120 to $1?
THOUGHTS OF LUCIO TAN: Can you live with our peso sinking to P120 to the US dollar? Before you faint, hear out the other insights of taipan Lucio Tan into the economy.
We’re not sure if what the Philippine Airlines chairman said in extemporaneous remarks at a small dinner last Thursday was off the record, but since he did not say it was “off” and since there were many people present, we assume that we can quote him.
His assessment, he said, is shared by other businessmen and bankers (he also owns Allied Bank) that with our weak exports unable to shore up our currency, the peso could fall to P120 to the US dollar in seven years.
He traced the peso’s decline from the time it was P2 to $1. At that point, who ever thought it would fall to 25 times lower to the present P50 to $1, he asked as he analyzed its continued decline and its comparable value alongside other Asian currencies.
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WE NOW EXPORT BODIES: Among the reasons given by Tan for the peso’s soft condition is our failure to gain headway in exports. Our products are not bringing in enough hard foreign currency.
Without mentioning quality and other criteria, he said our exports cannot compete in the world market because they are priced higher than opposite items of other countries.
We’re lucky, he said, that our low export dollar earnings are partly covered by the $20 billion that Filipinos laboring abroad remit to the country every year.
One of the reasons for the high price of our exports is that local labor has become more expensive and is unpredictable. He said this has also made foreign investors cautious about locating in the country.
The supposed advantage of Filipino workers being able to speak English has been wiped out by the rapid improvement in the language proficiency of workers in competing countries. He proposed some revisions in the school curriculum.
We have been reduced to exporting people, he deadpanned, both dead and alive. He said in a light vein that aside from exporting labor (there are now more than 7 million Filipinos abroad), we are now selling cadavers and body parts or organs abroad.
We would have shared with you more interesting insights of Tan, as we did once some thoughts of another taipan, John Gokongwei, but we don’t have much space.
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NAPOCOR-MERALCO ROW: We were surprised that soon after the National Power Corp. (Napocor) and the Manila Electric Co. (Meralco) smoked the peace pipe, Asiclo Gonzaga, president of the National Transmission Corp. (Transco) that manages Napocor transmission lines, drew blood.
Gonzaga took Meralco to task for continuing to build the San Lorenzo plant of its independent power producer (IPP) First Gas despite knowing of the oversupply situation. First Gas’ San Lorenzo plant is ready for commercial operation.
How come Gonzaga does not seem to know that the Department of Energy gave Meralco the green light to go ahead and construct the San Lorenzo plant. Gonzaga was then senior vice president and chief operating officer of Napocor.
The construction of the natural gas plants of First Gas (Sta. Rita and San Lorenzo) was a result of a series of correspondence between then Energy Secretary Francisco Viray and Meralco. The DOE challenged the Lopez franchise to account for 1,500 megawatts or 50 percent of the output of the Camago-Malampaya natural gas field.
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GAS PLANTS RECOGNIZED: In a letter to Meralco on March 10, 1995, Viray, who also sat as chairman of the Napocor board, said in part:
“The Malampaya Gas Project is of such strategic importance that we cannot allow it to be delayed because of the inability of the private sector to firm up its commitments. We are therefore giving Meralco and its IPPs up to April 30, 1995, to firm up its share of the market, and if they are unable to do so, the government will have to firm up the market itself.”
At the time Gonzaga was Napocor vice president for projects management. He must have known of how the Malampaya project developed.
Under the Power Development Program (PDP) set in place by Napocor in 1995, San Lorenzo was recognized as coming on line January 2002. Under said PDP, five natural gas plants, San Lorenzo among them, were required to go operational, with one plant coming on line every year from 2000 to 2004.
In December 2000, Meralco and Napocor signed a Letter of Agreement for the optimum operation of Meralco’s IPPs. Napocor committed full transmission access to San Lorenzo effective March 1, 2002.
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‘SUMBONG’ FROM ROMBLON: We residents of Metro Manila are lucky that our concerns over the explosive presence of fuel depots in Pandacan are being addressed by Manila Mayor Lito Atienza. He said the depots’ relocation is non-negotiable. The bulk tanks are a ticking time bomb right in the heart of the densely populated city.
But suppose the setting for a high-risk oil depot were a provincial site, the local official were not an Atienza type, and no Manila-based media reported on the concerns of local residents?
We ask this, because we just received an email from Gene Reyes, president of the Concerned Citizens of Romblon (CCR), “making sumbong” about a Petron bulk plant being built in a tourism-residential-agricultural zone of Tiamban-Ipil and Lonos with the blessings of Environment and Natural Resources Secretary Heherson Alvarez.
The popular joke that a 2,000 pound gorilla does not have to consult anyone where he wants to sit, may now be applied to Romblon where fuel giant Petron Corp. built a bulk plant adjacent to a residential area (Ipil, off Lonos beach), not far from the heart of the island’s eco-tourism zone and proposed marine sanctuaries.
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ALVAREZ FAVORS PETRON: This project was pushed through over the opposition of residents living across the street from the bulk plant and organizations such as the CCR and a community-based advocacy publication. Even before construction began, in 2000, the head of an alumnae association (Viola Madrona Reyes), already opposed the project in writing, on environmental grounds.
Last April, Romblon Gov. Eleandro “Budoy” Madrona personally appealed to Secretary Alvarez for the DENR to conduct a public hearing on the controversial project. He offered the session hall of the Sangguniang Panlalawigan at the capital as the venue so that it will really be an open hearing.
The new mayor, Leo Merida, reactivated the Municipal Tourism Council of Romblon, which quickly and unanimously approved a resolution requesting Petron to relocate its bulk facilities to a safer place in the island’s designated industrial zone.
But just like he did in the Pandacan fuel depot case, Alvarez has raised eyebrows among environmentalists by siding with Petron, thus paving the way for the commercial operation of the bulk plant last month.
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OBJECTIONS LISTED: For reasons only he could answer, Alvarez ignored the following arguments of those opposed to the project:
- It is in the wrong place of the island.The bulk plant is situated off Lonos bay and Romblon bay, two well-enclosed waters in dire need of ecological rehabilitation and protection. These waters also constitute the island’s lifeline.
Like the depot in Pandacan, any terrorist attack at the Ipil plant could cause tremendous damage to the community. Even without a terrorist attack, there is the real and imminent danger of massive fuel spills and explosions in the event of barges and tankers colliding with passenger boats or sinking in nearby waters during a storm. Even docking and filling up operations at Ipil beach are potentially dangerous.
- Governor Madrona’s call for a public hearing is well taken. A Sangguniang Bayan zoning ordinance of 1979 explicitly requires “an open, well-advertised public hearing, before a variance on ‘reclassification’ of a property could be approved by the government.”Without a public hearing at the municipal level, the validity of the DENR Environmental Compliance Certificate (ECC) granted in 1999 to Petron and the operator of the bulk plant is flawed.
The purported “barangay endorsement,” required for such projects, turned out to be only the “personal endorsement” of the barangay captain of Ipil (now deceased). There was also no public hearing at the barangay level and no barangay council resolution endorsing the project.
All of these violations were brought repeatedly to the attention of the DENR, from the regional director to Secretary Alvarez. To no avail.
- The bulk plant runs counter to the provincial vision of an “ecologically balanced province” and violates the Provincial Physical Framework Plan (PPFP) of the government for 2000-2010, concerning LGU policies on land use and zoning.
How could the provincial government and private groups put up their planned marine sanctuaries, patterned after the successful ones in Looc bay, Tablas, Romblon, when fully-loaded barges and tankers can freely navigate the coastal waters where the sanctuaries are supposed to be established?