A classic explanation of why it’s so is in the electricity bill.
Looking at how much electricity is consumed, some 51 percent to 57 percent of the total electric bill is the cost of the power that the company buys from power generators (generation charge). Other reflected charges in the bill cover distribution costs, transmission charge, system losses charge, taxes and other charges.
As the Philippines maintains its stature as one of the countries with the highest electricity rates in Asia, Filipino consumers continue to suffer from skyrocketing power rates. Concurrently, every day is a field day for Manila Electric Co. (Meralco), “the king” of the power industry, as it continues to rake in billions in profits.
The reported 2016 net income of Meralco went up to P19.176 billion from P19.098 billion in 2015. For the fourth quarter of 2016, core income was at P4.6 billion, from the comparative quarter of 2015 at P3.10 billion, noting that there was a “dip” that time because the Supreme Court decision on real property taxes (RPT) came out and there had been items that they had included in the approvals.
How did Meralco turn up into such a moneymaking machine? Thanks to President Gloria Macapagal-Arroyo’s Electric Power Industry Reform Act, or Republic Act 9136 of 2001, consumers are obliged to pay for the electricity’s production costs, on top of the electricity they actually consumed. Thus, the generation charge when it buys from power companies and the transmission charge paid to the National Grid Corp. are automatically passed on to the consumers.
This is the perfect archetype of an extractive policy: taking out resources (money) from the many (Filipino consumers who are forced to pay so much for electricity, while they can hardly afford the basic necessities for their daily lives) by the few (power companies, and in this case the Meralco), all for raking in remarkable profits.
It is not surprising, therefore, why 13.1 percent of the country’s population remain hungry, according to the Global Hunger Index, where the Philippines ranked 29th in the world, just behind Iraq and Lesoto. In Southeast Asia, we lag behind Indonesia, Malaysia, Thailand, Singapore and Vietnam.
To further answer this question, we should take a glimpse at our history.
For instance, the later part of the 1980s tells a different story. Filipino economist Felipe Medalla, who served as National Economic and Development Authority director general in President Joseph Estrada’s administration, expounded on this in a conference paper, titled Economic Integration in East Asia: a Philippine Perspective.
“The Philippines,” he said, “is not as sanguine as China, Malaysia or Thailand about the implications of greater economic integration in the region is hardly surprising if one has looked at how the Philippine economy has performed since the second half of the 1980s, when international trade started to be significantly liberalized (beginning with the administration of President Corazon Aquino).
“The Philippine economy actually grew more during the import-substitution and protectionist decades of the 1960s and the 1970s than over the past 20 years.”
Despite incontrovertible evidence, the Philippine Development Plan (PDP) for 2011 to 2016 approved by Cory Aquino’s son, President Benigno S. Aquino III, firmly upholds that protectionist measures are “policies that distort competition” and are “the main impediments to growth”.
To aggravate this situation, instead of exporting capital goods as a way of integrating the Philippine economy with the global economy, where the first naturally gains more than the late comers, what we shipped off to almost every part of the world are our human resources.
In the Overseas Employment Statistics of the Philippine Overseas Employment Administration (POEA), the country deployed a total of 2,391,152 overseas Filipino workers (OFWs) in 2014, roughly 600,000 of whom are new hires, and the figures keep on increasing up to the present.
These glaring figures are proof of the lack of a concrete and comprehensive program for domestic job creation, and the massive exodus of our labor force is detrimental in the long run, as the country will eventually be depleted of invaluable human resources.
To reach the writer, e-mail cecilio.arillo@gmail.com.