POSTSCRIPT / September 14, 2004 / Tuesday


Philippine STAR Columnist

Share on facebook
Share This
Share on twitter

Fiscal + power crises = 1-2 knockout punch!

WHY WAIT?: By proclaiming their grand plan to abolish pork barrel in the national budget in 2005, cholesterol-choked congressmen led by Speaker Jose de Venecia may have supplied us the most telling argument for eliminating the sticky pork now!

If the pork lovers in the House can give it up next year, there is no big reason why they cannot give it up now — especially with the nation in deep fiscal crisis arising from a gargantuan budget deficit that they have helped create.

Puede naman pala, eh. Why do we have to wait for next year pa ?

* * *

POWER CRISIS: While grappling with the fiscal crisis, the Arroyo administration also has to move fast to forestall a power crisis that could knock out the economy before the end of the President’s term in 2010.

If the government does not act promptly, as usual, it could be forced to again fast-track lopsided contracts with Independent Power Producers. This will add to the already heavy burden forced on us captive consumers.

We may need as much as $6 billion, per estimate of the Asian Development Bank, to build the plants to generate the projected power demand. Where will this cash-strapped nation get that kind of money?

If no solution is found TODAY — not tomorrow or the day after — the power crisis merging with the fiscal crisis could wreck the fragile economy beyond repair.

Are we scaring you? Yes, we are.

* * *

FACTS & FIGURES: If you are still unconvinced, look at the description of the looming power crisis:

Present dependable capacity is around 13,000 megawatts, enough to cover peak demand of 8,500 mw, according to the Department of Energy.

Five years from now, however, the country will need an additional 2,500 mw, which will require $2.5 billion in investments in power generation — and a lag time of about three to five years for building the new plants.

The Asian Development Bank said in a study that an additional 6,000 mw is needed in the next 10 years. Using the rule of thumb that $1 million is needed per megawatt to put up the plant(s), this will require $6 billion.

The Visayas, particularly Panay, is already experiencing rotating power blackouts. Luzon itself is sometimes hit by unscheduled brownouts.

A study by BusinessWorld on the 1989 power crisis showed that blackouts cost business P26.9 billion, or 3 percent of the Gross National Product. In 1992, blackouts stunted the growth by about 1-2 percent.

The American Chamber of Commerce said in a recent advocacy paper: “Given the four-five-year gestation period for building new power plants, we appear to be entering a critical period in which further drift in implementing power sector reforms will increasingly doom the economy to repeat its 1991-1994 blackout experience.”

In a conference on power last May, PCCI energy committee chairman Jose Alejandro said: “If acute power shortages of power is expected by end of 2007, or early 2008, the decision to place an order for a new fossil fuel-fired power plant should be made within the next 60 days.” That was more than 100 days ago!

* * *

CITO’S REBOUND?: Businessman Luis “Cito” Lorenzo may have been replaced as agriculture secretary in an awkward takeover by Arthur Yap, but do not count him out yet. There is talk that Lorenzo may just bounce back — this time in a big way in the private sector.

The grapevine says that SMC chairman Eduardo “Danding” Cojuangco, a bosom friend of opposition presidential candidate Fernando Poe Jr., might find himself under increasing pressure to give way to a Palace nominee who looks like Lorenzo.

If Malacanang is determined to put in its own chairman, it can muster the numbers in the 15-man board to do it — as already indicated when PCGG chairman Haydee Yorac recently threatened a takeover before nervous Palace types calmed her down.

* * *

NAKED POWER: With sequestered 27-percent of SMC shares equivalent to five seats, plus two seats occupied by the Social Security System and the Government System Insurance System, the government needs only to flex its convincing powers to take one more seat to clinch an 8/15 majority control.

Compared to government’s seven clear seats, Cojuangco has three representing the 20-percent share he was allowed by the courts to keep and vote. He also has two additional seats (15 percent) pertaining to Kirin Beer that has bought into San Miguel.

Without adroit handling, however, any show of naked power by the government is likely to have a negative effect on the morale of San Miguel personnel, investors in general and the value of the shares in the stock market.

Rightly or wrongly, it is almost an axiom that what is bad for San Miguel is bad for the economy.

* * *

CITO BIO-NOTES: Who is Cito Lorenzo, you may ask.

Well, this favorite student of GMA at the Ateneo (also a Wharton alumnus) was tasked to generate a million jobs, aside from being the agriculture secretary before the demolition boys caught up with him after the May 10 elections.

On his own right, Lorenzo was among the wealthiest and well-connected members of the Arroyo Cabinet. His family is one of the world’s biggest banana/pineapple exporters. It handles huge volumes of trade with China.

His late grandfather was once political kingpin of Zamboanga, and his late father, the sports buffs will remember, was the Ateneo’s famed basketball star Moro Lorenzo. His late aunt Mayor Maria Clara Lorenzo Lobregat was an ally of “Danding” Cojuangco, but, well, nobody’s perfect.

* * *

UNUSUAL RULING: The SMC chairman’s fate comes to mind in light of a recent Supreme Court decision ordering the criminal prosecution of Cojuangco, Sen. Juan Ponce Enrile and several others for their purchase of 16 coconut mills using coconut levy funds.

The ruling overturned a resolution of then Ombudsman Aniano Desierto finding no cause to sue the personalities who benefited from the controversial coconut levy imposed during the Marcos regime.

The Ombudsman’s resolution affirmed the validity of the respondents’ claim that the purchase of the mills by the United Coconut Oil Mills (Unicom) was legal and in consonance with several presidential decrees.

But the high court ruling penned by Justice Ma. Alicia Austria Martinez said that even if the acquisition was legal, “it does not detract from the fact that such acquisition caused undue prejudice, disadvantage and injury to the government.”

Martinez also threw out a motion of Cojuangco to quash an SC order to the Ombudsman to proceed with the investigation of the P9.6-billion graft charges against him, Enrile and others.

That decision, handed down on Sept. 23, 2002, cast aside the Desierto resolution and revived the long-forgotten case.

* * *

RAISED EYEBROWS: The same ruling said it was foolhardy to grant Cojuangco’s plea since “the validity of the laws would create a blanket shield and there would be no prosecution” for those who violate the Anti-Graft and Corrupt Practices Act.

It is curious that the decision came amid the admission of President Arroyo that the country is in the throes of a fiscal crisis, brought about mainly by a P312-billion budget deficit worsened by the runaway overspending in the last presidential election.

Some lawyers are uncomfortable with the observation that those who sit in judgment on the Unicom and related cases were the same persons who had prejudged the case before they were appointed to the high court.

In its order, the SC — which is not supposed to try facts — appears to be imposing its own appreciating of the facts on the Ombudsman who had long thrown out the case.

t would be interesting to see how the Ombudsman would go into contortions investigating a matter that the Supreme Court, which is waiting above on appeal, had already said was worth filing.

* * *

(First published in the Philippine STAR of September 14, 2004)

Share your thoughts.

Your email address will not be published.