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TOMORROW, the Energy Regulatory Commission (ERC) will
hold a consultative meeting that will bring together key
players in the energy industry, as well as consumers, to
discuss the recent increase in electricity costs.
For
consumers, the meeting should be a good opportunity for
them to understand why their monthly electric bills keep
mounting seemingly without rhyme or reason, and what
action the concerned agencies are taking to protect them
from unwarranted price surges, especially at a time when
they have to deal, as well, with the rising prices of
food and fuel.
The
consultative meeting is timely and appropriate in the
light of recent moves by the government to bring down
electricity rates, said to be the second-highest in
Asia.
President Arroyo has ordered the state-run National
Power Corp. (Napocor) to cut by half its charges to the
country’s biggest power distributor, the Manila Electric
Co. (Meralco). Thus, Napocor will now charge Meralco the
same preferential rate of P3.52/ kilowatt-hour (kWh) it
charges the high-load factor industrial customers
accredited by the Philippine Economic Zone Authority.
This, according to Napocor, is lower than the rate it
charges the Luzon electric cooperatives, which is at
P4.11/kWh.
The
government says one reason for our high monthly electric
bills is that Meralco has been purchasing electricity
from the Wholesale Electricity Spot Market (WESM) during
peak hours. Thus, it has asked the Department of Trade
and Industry to file a petition with the ERC to enjoin
Meralco from buying electricity from the WESM during
peak hours. The government also wants Meralco to ensure
preferential treatment for households and
power-intensive industries in the distribution of
National Transmission Corp. charges, prohibit the
power-distribution firm from charging its system loss as
a separate item and require it to charge the same rates
as the Visayan Electric Co., Cebu Electric Co. or Davao
Light, whose distribution charges are all lower than
Meralco’s.
But we
seriously doubt if consumers can expect their monthly
electric bills to take a nosedive from hereon, because
the distribution charge is only one component of our
monthly electric bill.
Those
who bother to scrutinize their monthly electric bill
will readily see that generation and transmission
charges, apart from government taxes, account for the
bulk of what we pay through the nose every month.
Napocor, for instance, has come under fire for alleged
overprice of coal for its aging power plants. Moreover,
the onerous contracts Napocor had forged with
independent power producers (IPPs) are deemed a major
factor, as well, for high rates. In fact, certain
provisions were so averse to public interest, notably
the take-or-pay imposition that effectively required
people to pay even for electricity they do not consume,
that the government was prompted to order a thorough
review of these IPP contracts a few years back.
Today,
President Arroyo says Congress is now in the process of
amending the Electric Power Industry Reform Act, or
Epira, to remove the requirement of 70-percent power
privatization for open access. Open access, she told
businessmen last week, will allow consumers to enjoy the
power of choice, which will also mitigate the cost of
electricity. While open access and retail competition
could indeed exert downward pressure on electricity
prices, lower electricity rates could be a pipe dream
unless the privatization of Napocor is accelerated and
the Epira is given a chance to work rather than amended.
That’s the position taken by foreign chambers of
commerce and the semiconductor and electronics
industries, who are all adversely affected by high power
rates, and they have
communicated this in no uncertain terms to Malacañang—but
apparently to no avail.
‘Buy Pinoy’
‘When
the buying stops, smuggling stops.”
That’s
the logic behind the “Buy Pinoy, Buy Local” campaign
launched last week by two business groups: the
Federation of Philippine Industries (FPI) and the
Federation of Filipino-Chinese Chambers of Commerce and
Industry. Apparently, it’s so persuasive that it has
earned the support of President Arroyo herself, who
promptly instructed the reissuance of an executive order
giving locally made products priority in the
government’s procurement of supplies and materials.
Form now
on, therefore, national agencies and local government
units, state schools, government-owned or -controlled
corporations and the police and military are required to
buy only products and materials that are made or
processed in the Philippines.
President Arroyo sees the campaign to patronize local
products as a “market-based solution” to the persistent
problem of smuggling that deprives the government of
much-needed revenues.
Although
acknowledging that buying local goods could be an
economic risk, Arroyo sees it as a key weapon in
fighting smuggling: “The challenge here is to reconcile
the legitimate interest of our local businessmen with
the obligation to make available the best goods and
services for our taxpayers at the lowest cost from a
truly open and competitive market.”
For FPI
president Jesus Arranza, the “Buy Pinoy” campaign is
ultimately all about protecting the consumers and the
economy. The campaign seeks to protect consumers from
cheap, substandard and smuggled supplies, many of which
come from
China,
and “to protect the economy from the ill effects of
smuggling.” But, he adds, they do not advocate a ban on
importation, because there are items that are not
produced or available in the Philippines.
The
campaign is a step in the right direction. While
globalization has facilitated borderless trade and given
Philippine products access to other markets, the country
cannot be the dumping ground of cheap goods that
threaten local industries and invariably doom them to
extinction. This may be tagged as protectionism, which
is anathema to the very spirit of globalization. But if
it’s protectionism that will keep the heads of
Filipino-owned industries above water, what’s wrong with
it? If it means more jobs for the labor force and puts
food on the table of the ordinary Filipino, “Buy Pinoy,
Buy Local” deserves everyone’s support, as well. |
