It looks like there’s no stopping Winston Garcia, president and general manager of the Government Service Insurance System (GSIS), from his quest for control of management and ownership of the Manila Electric Co. (Meralco).

Yesterday Meralco share prices took a beating on fear of a possible takeover by the government of Meralco, a sentiment shared by stock-market players, as shown by the drop of prices from P80 last month to just P63 yesterday. 

On Friday Meralco share prices hit a low of P62 amid the suggestion of President Arroyo that “all industry players, particularly private generating companies and distribution utilities, [should] cooperate in finding solutions on how to implement open access now.”

It seems, however, that Garcia is not taking the suggestion of the President seriously because it’s still all systems go, as far as the GSIS is concerned, for the eventual takeover of Meralco today, depending really on how many proxy votes Garcia can muster.

Apparently, Garcia is so much obsessed with power because, otherwise, why should he not abide by the President’s wish that in lowering electricity rates, the government and other players should reconsider the immediate implementation of interim open access?      

In this regard, the Cabinet approved the proposal to allow major electricity users like malls, factories and five-star hotels to directly source their power requirements from independent power producers (IPPs).

Finance Secretary Margarito Teves also said on Friday that he and other members of the Cabinet would meet Meralco executives today, Tuesday, to look for ways to reduce electricity rates.

Electricity rates in the Philippines are among the highest in Asia, next only to Japan, but that’s because of the value-added tax (VAT) the government exacts from Philippine consumers.

Acting National Economic and Development Authority Director General Augusto Santos said the government should consider the removal of the VAT on fuel and on system losses and royalties to unburden consumers from high taxes.

Speaker Prospero Nograles has also joined the clamor for the removal of the VAT, but all pleas from Garcia seemed to have fallen on deaf ears.

So, today, Garcia will continue with his quest for Meralco ownership for various reasons. One of them is the alleged mismanagement of the utility firm at a time when GSIS members themselves are asking Garcia to account for his style of management, which is not exactly endearing to government employees who own GSIS and the 33-percent share in the name of GSIS.

As explained by Santos, the interim open-access scheme is a stop-gap measure to allow consumers to directly deal with IPPs even if the government has yet to privatize majority of its power-generation assets, which, by the way, is taking the National Power Corp. (Napocor) the whole eternity and beyond to implement.

Under the Electric Power Industry Reform Act (Epira), the government can only implement an open-access system if it has already privatized 70 percent of its power-generation assets.

The interim open-access scheme, to be proposed by the IPPs to the Energy Regulatory Commission, removes distribution and system-loss charges being charged by power-distribution companies in the country like Meralco that supplies electricity to the whole of Metro Manila.

Distribution charges account for 10 percent to 20 percent of a consumer’s bill, and system-loss charges, based on Meralco data, account for 9.5 percent of electricity cost.

Even the Joint Foreign Chambers in the Philippines has reiterated its position that effective implementation of the Epira removes distribution and system-loss charges being charged by power-distribution companies in the country.

The chamber is composed of the American Chamber of Commerce of the Philippines Inc., Australian-New Zealand Chamber of the Philippines Inc., Canadian Chamber of Commerce of the Philippines Inc., European Chamber of Commerce of the Philippines Inc., Japanese Chamber of Commerce and Industry of the Philippines Inc., Korean Chamber of Commerce of the Philippines Inc. and the Philippine Association of Multinational Companies Regional Headquarters Inc. 

E-mail: raulbvalino@yahoo.com.ph

NO one, till now, has quite any clear idea of where this latest floater by the administration, i.e., that telcos be compelled to provide free-texting services, is coming from, or what it really aims to achieve with it. But perhaps it can find the time—and humility—to listen to the sensible views of an expert, Catanduanes Rep. Joseph Santiago, who on Monday declared that “this is simply not workable.”

Mark the day after tomorrow on your calendar. First-quarter economic data for the Philippines will be released on Thursday.

The first-quarter numbers are important as several factors affect the results for these three months.

Today is the day the Manila Electric Co. (Meralco) will hold its annual stockholders’ meeting, but it will be one unlike any other it has ever held in the past.

Mirror on the wall: Stock mart jittery over Garcia’s threat to take over Meralco

It looks like there’s no stopping Winston Garcia, president and general manager of the Government Service Insurance System (GSIS), from his quest for control of management and ownership of the Manila Electric Co. (Meralco).

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