POSTSCRIPT / December 10, 2006 / Sunday


Philippine STAR Columnist

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Con-Ass storm may just blow GMA off her perch

FLAWED FORMULA: Note that the House of Representatives invited senators individually — not the Senate as a body — to its threatened Constituent Assembly this coming week.

From that fact alone, even high school kids will see immediately the folly of that Con-Ass adventure of Speaker Jose de Venecia et al. We do not have to go and ask the Supreme Court.

They want a Constituent Assembly of the two chambers, so why is the House going it alone?

The collective ego of majority congressmen may be super-bloated, but that unfortunate fact is not big enough to transform their chamber into a bicameral Congress envisioned in the Constitution to perform constituent functions.

Even if more than half of the 24 senators join the Con-Ass, their individual presence will not cure the flaw of the De Venecia formula. Thirteen senators walking in do not make a consenting Senate without a concurring resolution.

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JDV BACKPEDALS: De Venecia and his followers in the House know that basic Con-Ass fact.

That may be the reason why De Venecia took one step backward yesterday. The Speaker was quoted as saying that his group would delay for a few days its plan to unilaterally rewrite the Constitution starting Tuesday.

This is not a concession to the Senate or to the people now rising with one voice to oppose the convening of a Constituent Assembly at this time to pave the way for congressmen moving over to the incoming Parliament.

But as if to show that he was not abandoning his Charter change plan, De Venecia challenged the Senate to agree to holding a Constitutional Convention (Con-Con) to craft a new Constitution.

He warned that if the Senate did not agree to a Con-Con, the House would proceed with its plan to convene itself into a Constituent Assembly. It could not be ascertained if those who heard him took his warning seriously.

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WRITING ON THE WALL: Like Manny Pacquiao’s knock-out of Erik Morales galvanizing the country, the steamrolling of the De Venecia train Tuesday night has unified the country against the arrogant display of misplaced power.

One wishes the House could show the same tenacity in passing legislation directly benefiting the poor, unemployed and the persecuted.

De Venecia and his minions in the House must have seen the writing on the wall.

The Catholic hierarchy, with its mandated organizations massing in the background, spoke clearly against Con-Ass. It served notice that it would organize public rallies to thwart it.

A foreshock came with the declaration of El Shaddai leader Mike Velarde that he and his flock, estimated to be at least three million, were also against Con-Ass. He added that if the congressmen insisted on it, he would lead his followers in street protests.

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GMA IN VORTEX: As the Con-Ass storm blew across town, President Gloria Arroyo made like she was so busy attending to calamity victims and such priorities to bother with De Venecia’s unleashing his Con-Ass storm troops.

Malacanang was tiptoeing around the issue, probably hoping the people will not remember that Ms Arroyo herself has batted a number of times for Cha-cha – be it via People’s Initiative or Con-Ass.

The President, whose legitimacy has been under question, is in dire need of a shift to a parliamentary system that could distance her from the debate over her presidency being under a cloud.

She needs a distraction, if not a total migration to less troubled waters.

If the President’s handlers do not play it right, Ms Arroyo might find herself being sucked into the vortex of a Cha-cha political storm. Such a crisis, if mishandled, could get out of hand and blow her away from her unsteady perch.

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POWER RATES: With a blazing Christmas around the bend and the Supreme Court decision finally allowing the Manila Electric Co. (Meralco) to go ahead with its 1.68-centavo-per-kilowatt-hour electricity rate in Metro Manila, people are again talking of the high cost of electricity.

It was a relief hearing Meralco vice president and utility economics chief Ivanna dela Peña saying that the SC ruling does not mean higher rates. The tribunal, she said, merely allowed them to re-implement the questioned pricing scheme.

In a 24-page decision, the SC reversed the CA’s July 22, 2004, decision and its Jan. 24, 2005, resolution allowing Meralco to implement the unbundled electricity rates it has been charging since June 2003.

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PADDED BY TAXES: People are asking why cooking gas and the fuel gas being used by a growing number of taxicabs do not come cheap when natural gas is piped from the local Camago-Malampaya wells off Palawan.

I recall some interesting revelations of Benpres Holdings chairman Oscar Lopez in a recent speech before the Foreign Correspondents Association of the Philippines touching on the pricing of electricity.

In the case of our own natural gas from Camago-Malampaya, the power plants using this clean natural gas are made to look more expensive compared to power plants burning imported coal because of taxes and royalties.

This is sad and ironic because in neighboring countries like Thailand and Malaysia, natural gas used domestically is even subsidized.

Lopez said we have prospectively 10 more Camago-Malampayas and another 10,000 megawatts of geothermal potential out there.

* * *

RISING COSTS: Lopez recalled that from having one of the lowest power rates in the world in the late 60’s, today the country finds itself struggling with one of the highest in the region.

During the 1960s, he recalled, the average cost of imported fuel oil was P1.68/barrel, translated to an average cost for all Meralco customer of 5.8-centavos-per-kWh. By the late 60’s, Meralco had the lowest power rates in Asia, and its rates were even lower than those in 43 of the 50 states in the US.

But while power rates were low for Meralco consumers, the firm had to pay a very high price for it. Meralco’s long term debt rapidly increased from P71 million in 1961 to P1 billion by 1975.

The power firm suffered some more when the Organization of Petroleum Exporting Countries made some moves 1971 that resulted in several increases in oil prices. From $1.68/barrel in the 1960’s, Meralco paid $4.68/barrel in 1973, $22.50/barrel in 1976 and $34/barrel in 1981.

In February 1970 as a consequence of serious trade and balance payment deficit of the country, a floating exchange rate system was adopted.

The three factors of exchange rate, inflation and fuel prices, sounded the death knell of the old era of private entrepreneurial power. That also saw the end of cheap power for Meralco customers.

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FUEL COST: Another development that contributed to Meralco’s woes was the declaration of martial rule in 1972. Through PD No. 40, Meralco and all other power plants were sold to National Power Corp. to be operated by a single entity.

During that time, he recalled, while there were efforts to develop indigenous energy sources such as geothermal, hydroelectric, and natural gas, they failed in comparison to those achieved by our Asian neighbors.

“Having not made any major advancement in this field, the country is still predominantly dependent on coal-fired power plants,” he said. “Fuel cost makes up for anywhere from a low of 5 percent to as much as 40 percent of the ultimate cost of electricity to the consumer.”

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NO PLANNING: Even today, though our indigenous fuels in the mix seem to have improved to almost 70 percent, we still have not narrowed the gap in our electricity prices compared with our neighbors. Our indigenous fuels appear costly.

Lopez explained that despite the press releases on encouraging the use of indigenous fuels, the country continues to impose heavy taxes and royalties on local fuels like natural gas and geothermal steam, which together produce more than 47 percent of our electricity needs.

He also cited the high cost of lack of planning. The scrapping of the Bataan nuclear power plant in 1986 led to a huge gap in the country’s power supplies and the lack of substitute plants and reserves led to the crippling 10-12-hour brownouts of the early 90’s.

The country’s scramble in the coming years to build and contract for power plants at the height of a power crisis demonstrates the perils of getting caught unprepared. The worst time to contract for new supplies is when investors are few and the urgency is great.

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(First published in the Philippine STAR of December 10, 2006)

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