POSTSCRIPT / May 22, 2003 / Thursday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Windfall of US visit: GMA running in 2004

ANOINTED ONE: It is becoming increasingly clear that President Gloria Macapagal Arroyo is the person to beat in the 2004 presidential election.

President George W. Bush has seen to that. As the great White Father baptized GMA’s Philippines as a major non-NATO ally of America, many of those in the crowd must have heard a voice intoning something like, “This is Gloria in excelsis, in whom I’m well pleased.”

The reality back home is that the usual whining is heard mostly in the traditionally oppositionist capital, some urban centers, and the media. In contrast, majority of the population in the countryside is not as vociferously critical.

In fact, most surveys spanning the provinces show that despite the carpers in the cities who complain about almost everything, most Filipinos are still pro-American. Any leader perceived to be America’s “Anointed One” grows in their estimation.

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UPTREND SEEN: We won’t be surprised if an uptrend shows in the next survey on GMA’s approval rating if conducted in followup of her arrival from her fruitful three-day state visit.

But don’t expect GMA to make a slip of the tongue when asked about possibly making a bid in 2004. She would have to dismiss the question and stick to her line that people in government should just work instead of talk politics.

Still, it would be naïve to assume that her fans and followers still believe a statement she made Dec. 30 last year that she would not run for the presidency in 2004.

This is a fast-changing world. She has the right, sometimes even the duty, to change her mind on important public issues if necessary.

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CHA-CHA IS DEAD: The neat scenario for her running for president would have been the adoption via a constitutional amendment of a parliamentary form of government. A change of government setup wipes clean the political slate, and she and everybody else are then free to make a dash for it.

With greed and ambition getting in the way of many politicians jostling for the starting line to be drawn by charter change, the adoption of a parliamentary setup before the 2004 election has grown dimmer. At this point, charter change appears no longer viable.

But even under the present system, there is no legal bar to GMA running for president. Good performance and public approval can overcome the weight of that statement she made in the heat of political passion about forsaking plans to run in 2004.

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ART OF DUCKING: Another reality check for the people, also for GMA, is the upcoming July 1 due date of the $500 million that the National Power Corp. borrowed to carry out her order to slash the Purchased Power Adjustment charge bloating electricity bills.

It has become apparent that the PPA reduction given consumers in June last year was nothing more than a deferral of something they cannot escape paying. It was removed from our electricity bills, but it will keep reappearing in our debt service bill.

The PPA-reduction scheme is a supposedly inspired idea proposed by Energy Secretary Vince Perez to President Arroyo who was looking for a way to mollify consumers hard hit by PPA charges doubling their bills.

A “financial engineering” they called it as Perez included it in the President’s famous 10-point plan for easing payment problems in the power sector. How will Perez duck when it boomerangs on him?

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TAXPAYERS’ BURDEN: The PPA component of the cost of electricity was reduced from P1.25 to 40 centavos per kilowatt-hour. Representing the cost of generating electricity, PPA is being passed on from the producers who had incurred it to the consumers.

Consumers are spared at the moment from paying all of it. But somebody still has to pay for the deferred expense eventually. The Napocor borrowed $500 million to subsidize this baby of Perez. Now it is almost payment time.

Who will pay for it? Don’t look now, but the same consumers who thought they had been spared the burden will pay for this big loan — with interest — by way of their taxes.

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ACCUMULATED INCREASES: A recent report of the American Chamber of Commerce (AmCham) has revealed that the slash in PPA payments was financed through a short-term $500-million (P26-billion) loan that expires June 30.

As consumers reeled last year from the impact of PPA, the “one-sided debate” (as the AmCham report describes it), brought out the fact that there is no evading the cost of generating power.

It was deemed unfair to have the Independent Power Producers (IPPs) and the distributors, mainly the Manila Electric Co. (Meralco), shoulder this expense since they were billing users based on depressed rates fixed many years ago by the Energy Regulatory Board. In the case of most distribution utilities, that was more than six to seven years ago.

Thus, the PPA reflects the accumulated increases in the cost of generating power but which the generators and distributors have not been able to recover because the ERB kept saying not yet.

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MOMENT OF TRUTH: It will be interesting to see how Perez, upon his return from the US state visit, will face this moment of truth when the $500-million debt falls due shortly.

Note this AmCham remark in its report: “Caving in to populism, political leaders failed to explain the rising price of electricity passed on by NPC (National Power Corp.) through higher PPA adjustment to Meralco and consumers.… Rather than educating the public, the Executive (Malacanang) took two actions, by means of a $500-million loan NPC reduced the PPA, effectively a public subsidy, due to expire in mid-2003.”

If the Energy Regulatory Commission (that took over from the ERB) approves a universal charge to enable Napocor to repay the loan, that can only mean an increase in power rates. But will the government have the guts to bite the bullet and raise rates?

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FRENCH SNEAKING IN: While nobody was looking, fast operators with Palace connections had been reportedly busy working out an arrangement whereby Ondeo, the French partners (40 percent) of Maynilad Water, will take over the concession that Maynilad has returned to the government.

This is intriguing because the problem is already under arbitration before a third party panel. It seems to us that some operators want to preempt the arbitration and force a compromise where the government will hand over the business to the French.

This is also ironic, because Maynilad executives have blamed their French partners for the massive losses in operation that had forced it to return the concession to the MWSS.

Although a Filipino sits as president, the highly paid French executives are the ones handling operations and the procurement of equipment and supplies.

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LUCKY LAW FIRM: The plot to deliver the business to the French thickened when a chief regulatory officer from MWSS reportedly told the operations manager of Maynilad (a French) to take instructions only from him.

Some MWSS personnel who witnessed the exchange found it unusual since there is a president (a Filipino) who is supposed to be running the company and arbitration is ongoing.

Another intriguing point is the reported involvement (again?) in the talks of, and the preparation of paperwork by, a Makati law firm with known “right connect” to the Palace. Some lucky lawyers seem to be everywhere where a killing is to be made.

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(First published in the Philippine STAR of May 22, 2003)

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