May 30, 2008

Populist posturing

I can imagine the political strategists of the Arroyo regime patting themselves on the back for successfully shifting media and public attention from the rice and oil crisis and generally gloomy economic prospects by means of Mrs. Arroyo’s populist posturing about bringing down the cost of electricity, freezing tuition fee increases in state colleges and universities and, as an added boon, making cell phone texting free of charge.

Too bad for Mrs. Arroyo and her bright boys, her credibility is so shot and the propaganda spin so full of holes, their attempts to pass on the blame for the people’s economic woes on everyone but the Arroyo regime itself is bound to backfire in no time. Yet it is also true that consumers, especially those in the low to middle-income brackets, are already groaning under the weight of the sudden, dramatic increase in the cost of living this first five months of the year and they welcome any relief, no matter if brokered by the Devil herself.

As a case in point, let’s take the popular demand to bring the cost of electricity down. Despite the nagging suspicion that all the sound and fury generated by the media war between Meralco and Napocor, the congressional investigations, and the boardroom battle for control of Meralco between the old-rich Lopez clan and Malacanang surrogate and power czar wannabe, Winston Garcia, will eventually amount to nothing, people still cling to the hope that at the end of the day their monthly electric bill will be significantly reduced.

But will it? Maybe, to some extent. Napocor can indeed reduce its generation rates with the coming of the rainy season and thus a more efficient use of its hydroelectric dams; electric consumption will also generally go down with cooler weather ahead; and if the reimbursement due from Meralco for the meter deposit every customer forked over to the utility firm and which the Energy Regulatory Commission has already ruled should be given back, will soon be deducted from the monthly bill.

Significantly? We doubt it. The Electric Power Industry Reform Act of 2002 or EPIRA, the overarching policy framework that has resulted in government relinquishing effective direction and control over the power industry, is very much in place. The privatization of the generation and transmission of electricity is ongoing with multinational corporations and Arroyo crony-capitalists gobbling up these state assets even as Napocor’s huge outstanding debts are absorbed by the government and eventually passed on to the unsuspecting consumers.

The anomalous and highly onerous contracts between Napocor and independent power producers (IPPs,) with the provision that all contracted power must be bought and paid for by Napocor whether or not it is “used” or in turn sold to power distributors such as Meralco, are also in place. In fact these preceded Meralco’s own contracts with Lopez-owned IPPs with the same provisions that government knew about and approved of but that Malacanang’s allies now loudly denounce as a patent case of conflict of interest. (In short, Meralco buys power from its sister companies even when their rates are higher than Napocor or the Wholesale Electricity Spot Market.)

The Arroyo regime refuses to countenance any VAT exemption for electricity sales. Finance officials recite the same old line that doing so would deprive government of much-needed revenue to spend on infrastructure and social services. They conveniently gloss over the fact that the biggest items in government expenditure are debt payments, the President’s unaudited pork barrel including so-called intelligence funds and the counter-insurgency program. In between the lines, read government wastage, mispriorities and humongous corruption.

Even all the noise generated by Arroyo allies in Congress exposing Meralco’s unacceptable practice of passing on their inefficiencies and overhead costs to consumers disguised as “systems loss” has not resulted in any Malacanang-certified urgent bill to rescind the law making such practice perfectly legal.
(No doubt that law passed through the persuasive lobby efforts of Meralco and other distribution firms.)

The power struggle at Meralco promises to be a long-drawn out affair with its customers and the people in general sidelined by the intra-corporate maneuvers and counter-maneuvers and blatant government interference in the light of the Lopez clan’s determined efforts to retain control over the highly profitable company. Mr. Garcia, the head of government employees’ insurance fund, wants the public to believe that all he is interested in is to lower electricity rates. However his close ties to the Aboitiz clan, the power magnate in the VIsayas, and his being an unabashed Arroyo loyalist makes his public declarations highly incredulous.

The only way the people will gain economic reprieve from this tussle among local vested interests (the Lopez-led Meralco, the Arroyo regime and the Garcia-Aboitiz rival power business group) is for them to push forward the genuine reform agenda on power. In other words, clamor for the review and eventual repeal of EPIRA, the renegotiation of Napocor’s IPP contracts, the immediate removal of VAT from electricity and a stop to the unjustified systems loss pass-on charge by Meralco and all other distributors to their customers.

Mrs. Arroyo, despite her tact of using popular demands in order to survive politically, is not about to turn her back on the neoliberal policies and programs she has committed herself to out of her own pro-imperialist and pro-big business bias and the pressure made to bear on her regime by multilateral financial agencies such as the IMF-World Bank, imperialist governments, international credit-rating agencies and the entire international infrastructure of monopoly capital.

Will the Arroyo regime bring prices of prime commodities and services down in the remaining two years of her stolen term of office? Don’t bet on it. #


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