By J R Ruaya
The normally staid and sober Senator Juan Ponce-Enrile went berserk in his latest privileged speech who lambasted foreign investors whom he called "catpetbaggers, predators, and buccaneers" saying they have no right to intervene in the country's political process.
He was specifically peeved at the recent letter of the influential Joint Chambers of Commerce in the Philippines to President Gloria Macapagal-Arroyo urging her (and Congress) not to amend Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) which forms the basis of the ongoing restructuring of the power industry. Enrile is spearheading the moves at Congress to amend the EPIRA.
"Who are these people coming here to say, 'you do this, you do that'? To them, I say, the hell with you, get out of this country,” Enrile said. “If you want to do business under the system with us, to those who are lecturing to us, enough is enough. It is not right for foreigners to be meddling in our affairs, meddling in the workings of government, meddling in our political life, duties of duly elected representatives of the people."
No, Mr. Senator, they are not meddling. They are just concerned. Besides, their nationals-investors-the very entities the EPIRA is enticing to come in to make the spirit of the law successful, are the ones affected. Listen to them first.
"We would like to reiterate our long-standing position not to amend RA 9136, the EPIRA which mandates the privatization of the Philippines’ energy sector. Amending EPIRA will have negative consequences that will not only dampen the confidence of both foreign and local investors but could even drive them away at a time when shortages in power supply already plague the Visayas and are expected in Luzon in the next several years. Amending EPIRA will result in a highly unstable legal framework for the industry and investors,” it said.
Besides, the initially slow pace of National Power Corporation's privatization of power assets is picking up, as three of the five conditions required to begin retail competition and open access, have already been met, it pointed out. The two other unmet conditions are the privatization of at least 70 % of Napocor assets and of Napocor-IPP contracts.
It cautioned that such action would derail the ongoing power reforms, a polite way of saying not to change the rules of engagement in the middle of the war for reforms.
Investors just want a stable and predictable regime of policies to operate. Is this asking too much?
International Finance Corporation (IFC)-Philippines Resident Representative Jesse O. Ang opined that it would be better for the government to allow seamless implementation of the EPIRA as has already been started, instead of endlessly attempting to amend some of its provisions.
Even PSALM head Jose Ibazeta says amending the EPIRA to bring down this threshold to 50 % is unnecessasry, since he is confident of meeting the original target before the end of the year.
Multilateral lender the Asian Development Bank (ADB) which is active in the power sector financing, chimed in, saying the government should commit to let the EPIRA work first so that investors would settle to a more stable and comfortable environment first.
Einar Stenstadvold of Norway, Executive Vice President of Asia of SN Power which has a joint venture with the Aboitiz group in hydro, emphasized that the robust framework of EPIRA was the reason for them to come to invest in the Philippines.
I hope the senator is listening to them.
If the issue is lowering the electricity rates, there are other ways of doing it even without touching EPIRA.
The Philippine Chamber of Commerce of Industries (PCCI) has identified many ways including:
- Efficient power source mixture of geothermal, hydro, natural gas, coal, bunker fuel and diesel to reduce use of imported fossil fuel.
- Maintain the heat rate of power plants for more efficient fuel burning
- Reexamine the distribution and transmission charges by reviewing the supply and metering system and the committed service component
- Suspend the 12 percent value added tax on power and oil for six months, including the royalty tax on natural gas.
Tweak the EPIRA at this time? Let it work first.
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