CHILDISH SNUB: It is bad form for Pampanga Gov. Ed Panlilio to snub official functions in his province where the main guest or prime mover is President Gloria Arroyo. What is he trying to prove or say by keeping away?

The priest-turned-politician may not see eye-to-eye with the province’s favorite daughter, who celebrated her 62nd birthday last Sunday with her cabalen, but protocol or simple courtesy demands that he showed up.

But by all indications, the President, her coterie and the milling crowd did not miss the governor.

It does not do Pampanga and its people any good for the governor to pick an unnecessary fight with the President instead of looking for ways to draw government attention and assistance to the province.

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LEGACY DEPOSITS: The Philippine Deposit Insurance Corp. is preparing to pay the insurance claims of depositors of Legacy-affiliated banks that have been shut down.

There may have been a diligent check by independent auditors on the integrity of every deposit, but the stench of Legacy operations refuses to fade away.

Before payments are made, authorities should put to rest the concern that some officials of PDIC and Legacy may have colluded to manufacture fake accounts to collect insurance payments for spurious depositors.

The audit should also ferret out big deposits split into different accounts to escape the P250,000 limit of PDIC insurance payments. Splitting indicates bad faith.

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FAKE DEPOSITS: Reports refuse to go away that accomplices, some of them government officials or their agents, may have been listed as substantial depositors when in fact no money had been deposited by them.

Although still unconfirmed, the scenario is scary. What if bogus depositors collect PDIC insurance payment for non-existent deposits that they supposedly lost when the Legacy pyramid collapsed?

Claimants who are government officials should be ordered to explain first where they got the money they had deposited and prove that their alleged accounts in the bank are reflected in their statements of assets as required by law.

The PDIC has distributed claim forms to 109,726 individuals, or about 78 percent of 141,000 depositors of 12 Legacy-affiliated banks that had been closed.

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RATE UPSURGE: Starting this month, electricity costs will go up nationwide as a result of government regulators having allowed the National Power Corp. to provisionally adjust its basic charges.

The Energy Regulatory Commission decision, finalized last Feb. 16 but released only last month, increased Napocor’s basic charge by an average of 46.82 centavos per kwh for Luzon, by P1.1460 for the Visayas, and by 71.47 centavos for Mindanao.

The rate increase would mean a 12-percent rise for Luzon and an even higher 39.7 percent and 34 percent, respectively, for the Visayas and Mindanao grids.

Based on the provisional authority, Napocor’s basic charges will be P4.3684 per kwh for Luzon, P4.0339 for the Visayas, and P2.8177 per kwh for Mindanao.

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FACTORY CLOSURES: Customers of the Manila Electric Co. (Meralco), the country’s largest power distributor, will see a 17-centavo per-kwh increase. A five-member household using an average of 200 kwh monthly would pay an extra P34.

The rate increase would be an additional burden for low- and middle-income earners who have been hit by factory closures resulting from bankruptcies in the manufacturing sector.

The electronics and semiconductor sector reeling from the financial crisis has reported massive layoffs. It said its troubles were compounded by prohibitive power rates.

The relocation to another couintry of electronics giant Intel, for one, is said to have been triggered by the high cost of local electricity.

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SAVE JOBS: The suggestion of the Philippine Chamber of Commerce and Industry and other industry observers is that electricity rates should be lowered to save critical industries.

The line is simple: The economy cannot pick up while the industry sector falters, and industry can flourish and stimulate the economy only when power costs are lowered to reasonable levels.

Given the poor Internal Revenue and Customs collections resulting from the closure or down-sizing of firms and the layoff of workers, the government may want to lower electricity rates by, among other measures, removing royalties on natural gas.

Finance Secretary Margarito Teves and Energy Secretary Angelo Reyes have agreed to study the royalties issue, but no word has been heard from them.

The energy secretary appears to be preoccupied with his quarrel with liquefied petroleum gas merchants and the cost of motor fuel, which are concerns of the Department of Trade and Industry.

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GAS ROYALTY: Industry leaders pointed out that one way of cutting power costs is to reduce or remove the royalty tax on Malampaya natural gas. Scrapping royalties, they said, would result in the reduction of electricity rates by P2 to P2.50 per kwh.

For every kilowatt-hour, the government imposes about P2 in taxes. Of the P2, power generators pay about P0.21 per kwh in Value-Added Tax. But the bigger share, P1.70 to P1.80 per kwh, is eaten up by royalties.

The main argument against scrapping royalties is that it would deprive the government of needed funds. Last year, the royalties collected on Malampaya natural gas reached $792 million or P38 billion.

But while indeed the government would lose some income, it would ultimately recover the loss many times over as the economy perks up.

If power rates were lowered by as much as P2.50 per kwh, productivity would be revived and new investments attracted. More jobs would be created, household incomes improved and consumer spending stimulated.