Ducky Paredes

“(T)here is the problem of the federal system being a more expensive form of government. Where will the country find the money for another layer of officials and governance? More taxes is where.”

by Ducky Paredes

 

I find simplistic the latest explanation by Senate minority leader Aquilino “Nene” Pimentel yesterday that his proposed federal system of government will not allow any extension to the term of President Arroyo.

“That will not happen because it is clear in my proposal that the term of the incumbent president will not be extended. Even my term as senator will be terminated in 2010,” he said.

In fact, he points out that Article 19 of his proposed federal Constitution provides: “Unless the incumbent president is removed from office, dies or resigns, the incumbent shall serve until 2010, the year her Constitutional term of office ends. She is however not qualified to run again under the Constitution.”

This was apparently written precisely for Gloria since it uses the feminine pronoun. What if Noli de Castro become president before 2010?

Besides, with all of his good intentions, a constituent assembly will not have to follow the wishes of any senator since there will be more congressmen in attendance. Since Gloria control the Lower House, she will certainly have her way with the constituent assembly.

And then there is the problem of the federal system being a more expensive form of government. Where will the country find the money for another layer of officials and governance? More taxes is where.

* * *

We have letters: “If it’s a consolation, the Philippines is not alone in its misery insofar as soaring gas prices are concerned. I’ve learned that the price of  premium gasoline there has already breached the P50/liter mark, and there is no relief in sight.  If it is a “consuelo de bobo”  for us Filipinos, price of premium gas in most  parts of the USA has already breached the $4/gallon mark. And with the spiraling cost of crude oil in the world market, the spectre of  much higher fuel price looms large.

 “If you think that  theft of gasoline from  parked or unguarded vehicles can only happen in the Philippines, it is not so anymore.  There have been reports of fuel stolen or siphoned from parked vehicles here. One particularly eye-opening incident happened in a Maryland car dealership.  The owner discovered the following morning that the lock in the gas pump in his car outlet was dismantled  and more 200 liters of gasoline pilfered by still unidentified perpetrators.  It can only be surmised that American are also feeling the pinch now. There has also been a very significant rise in the number of commuters using the mass transit system to save on gas.

“Score one for the administration.” — Cris Maralit

* * *

Since 1 US gallon = 3.78541178 liter, that would put the U.S. premium gasoline price at $1.056688210549 or P45.58 which would be our price without VAT and the additional taxes and other charges that our government imposes.

A report on US television says that people in California are cutting down on their car usage to the point where sales in malls and downtown stores are affected.

Since a lot of us in the Philippines are poor, why do we still have traffic jams all over Metro Manila? One son in the states called to ask if there still was traffic on Edsa. Of course, there is and eight cylinder SUVs are still being sold and bought. Obviously, the rich do not feel any pinch although the daily wage earner is hard-hit by the oil and rice crises.

As for stealing gasoline from parked cars, this is a particularly middle class crime. After all, what would you do with gasoline if you did not own a car? Thus, don’t expect that to happen here unless one has a diesel machine in his car.

* * *

“At the risk of sounding like I am defending Meralco (which I am not), 72 million kWh is really not that much. If you divide 72 million by 3600 (your annual electricity consumption), it comes to 20,000. Which means 20,000 households, with each household consuming 3,600 kWh per year, will consume a total of 72 million kWh. That’s probably the population of a small city.

“I’m sure that Meralco has not been the ‘model corporate citizen it can be’, but instead of shooting the messenger, perhaps your investigative resources can be better utilized by looking at the policies that govern the pricing of generating and transmitting electricity to the consumers. Meralco has been operating for the past several decades, so it must be presumed that they were, and are abiding to the rules and regulations set by the government.” — Tony Serquina

* * *

The policies that the regulators – in this case the Energy Regulatory Commission (ERC) – write do not so much regulate the energy business; in fact, it sometimes seems that the utilities (especially when they are as large as Meralco) regulate the ERC and other agencies that are tasked with reigning in the greed of the capitalist.

In a poor country like the Philippines, the power of money is unbridled. Most regulators are easily dissuaded from being overly strict with those they are regulating.

Thanks for your computation. I am a writer not a math person.

* * *

On Monday, the Rotary Club of Pasig will hold its President’s Cup Golf Tournament at Sun Valley in Antipolo. This is a new course that is built like a private club with great grass and design that treats itself like a public course. Anyone can pay on the course by paying the green fee.

It is very near Forest Hills.

Our present RC Pasig President Conrad Cuesta ends his term in June. Our incoming President is Dr. Sonny Samson.

It should be a fun tournament as Rotary golf often is.

* * *

The five-day golf tournament of Paco Park Oasis Hotel (which is right beside Paco Park) is called the Oasis Park Hotel Golf Classic. Also, the schedule is Monday, April 19, 2008 at Canlubang. Tuesday it goes to Malarayat; Wednesday is Forest Hills; Thursday is at Sherwood and Friday at Canlubang, again.

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hvp 05.16.08)

Readers who missed a column can access www.duckyparedes.com/blogs. This is updated daily. Your reactions are welcome at duckyparedes@yahoo.com

Malaya (05.15.08)

 

“One has to wonder: Has the OMB under Manzano been closing down outlets of pirated media of friends close to Congressman Tieng?”

by Ducky Paredes

 

One need not wonder that Movie Star and Television host Optical Media Board Chairman Edu  Manzano is again under attack in Congress.  This comes up every time that there are budget hearings. What is refreshing is that the ones who are upset with Edu are always those who are, like Edu, involved in show business. This must mean that he is doing a good job.

Before Edu’s volunteer  nemesis was Senator Bong Revilla. Presently, it is another showbiz person, Part-list Rep. William Tieng of the Buhay Party who has been overly critical of Manzano. One has to wonder: Has the OMB under Manzano been closing down outlets of pirated media of friends close to Congressman Tieng?

Perhaps, after all, Congressman Tieng scores the OMB under Manzano as being ”selective” in their raids on these outlets.

Is it possible that the incessant OMB raids are hurting some people close to him?

The lawmaker also again brings up the  accusation that Edu has not been attending to the budget hearings. Yet, if he asks around, he will see, from his own staff, the autographs and pictures of Edu for each time that he goes to Congress. According to OMB Executive Director Atty. Rosendo Meneses, the records will show that Chairman Manzano has been in Congress each time his presence was needed.

The Buhay Party representative also says that the OMB is “inefficient.”

Contrary to Congressman Tieng’s claim, the OMB has scored very significant gains in the fight against piracy in the country, backing up this claim with the following figures:

In 2007, OMB conducted 2,526 operations and seized 4.8 million units of pirated optical discs estimated to be worth P1.12 billion.

The OMB filed 22 criminal charges against those arrested during the raids, plus some 2,500 administrative complaints nine of which involved CD replicating machines used in the production of counterfeit CDs.

Of the total 573 raids conducted by law enforcement agencies against piracy, 77 percent or 443 were made by the OMB.

The OMB accomplishments for 2007 formed a major part of the basis for the Special 301 Reports issued first week of May 2008 by the United States Trade Representative (USTR) where the Philippines was commended for being one of only seven countries that showed significant progress in implementing controls on optical media production.

Equally impressive results against piracy in numerous OMB operations in prior years led the US Trade Representative in 2006 to scratch the Philippines from its Priority Watch List and place it on the Ordinary Watch List. The Priority Watch List contains the names of countries that have earned notoriety for rampant piracy and widespread violations of Intellectual Property Rights.

As for Manzano not attending OMB budget hearings, perhaps Rep. Tieng can help fight piracy by convincing his fellow legislators to increase OMB’s P25 million budget. He does not need Manzano’s presence to do that.

As it is, most of that money goes to Salaries, maintenance and administrative expenses. OMB’s budget for enforcement operations is less than  P100,00 monthly.

That the OMB can still do its job at all is a feather in Edu Manzano’s cap.

* * *

If you were not able to go for the Initial Public Offering (IPO) of San Miguel Beer, Inc. (SMB) which was available Monday, it is too late for you. You missed out on a good one. Today, it is doing P8.60 from the IPO price of P8.00.

Following a week-long domestic offer period and two weeks of international road shows, San Miguel Beer Inc, (SMB) San Miguel Corporation’s crown jewel attracted substantial interest, with the local tranche oversubscribed a day before the close of subscriptions on 05 May.

SMB may turn out  to be the country’s biggest IPO this year. At its IPO price, securities company IGC Securities, Inc.  placed SMB’s P/E of 13.4x in 2008 at a 20% premium over the market’s P/E of 11.2x.

The beer business accounts for around 40% of San Miguel Corporation’s (SMC) operating profit.

Citing the company’s track record of profitability, its reasonable value relative to the market, its consistent earnings growth and rich dividend yield, IGC Securities, Inc. had recommended SMB, as solid long-term investment, saying that the IPO “will unlock SMB’s hidden value. . .as it is poised to benefit from greater management once it becomes a stand-alone public company.”

In its report sent to investors, IGC Securities, Inc. said, “SMB offers a pure-play in the best part of SMC, without the overhang from its non-core businesses.”  Furthermore, it said “the historical data that show the operational improvements… [will] eventually lead to market out-performance in the next 2-3 years.”

The securities firm’s strong “long-term buy” recommendation is also based on a promised rich dividend yield of 6.5%, 44% higher compared to the market’s average yield of 4.5%.  “SMB’s dividend policy is to payout 100% of its earnings,”  the report said.

Of the shares offered, 90% percent are secondary shares belonging to SMC and ten percent are new shares issued by SMB. Only the proceeds from the 10% new shares will go to SMB.

According to an analyst’s report: “Though domestic beer volumes have been flat from 2005-07 at 13mn hectoliters/year, revenues have been driven by price increases while margins buoyed by cost control.

“Going forward, SMB aims to increase the size of the Philippine beer market and its already commanding 95% share of the market by deepening its geographic coverage (distribution) and increasing product visibility (advertising and promotion).”

Watch for more IPO’s as SMC sheds off other stand-along companies of the group – packaging, bottling and others.

It’s nice to see that the Boss – Danding Cojuangco – will eventually be riding off into the sunset with what has become his greatest business achievement poised for even greater success. Comfortable in the SMC nest, the other companies might have been stunted. On their own as stand-alone companies, they must grow wings.

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hvp 05.14.08)

Readers who missed a column can access www.duckyparedes.com/blogs. This is updated daily. Your reactions are welcome at duckyparedes@yahoo.com

“The question is: should public interest prevail over private profits?” 

by Ducky Paredes

“In third world countries like the Philippines, equal justice will have a synthetic ring unless the economic rights of the people, especially the poor, are protected with the same resoluteness as their right to liberty. The cases at bar are of utmost significance for they concern the right of our people to electricity and to be reasonably charged for their consumption. In configuring the contours of this economic right to a basic necessity of life, the Court shall define the limits of the power of respondent Meralco, a giant public utility and a monopoly, to charge our people for their electric consumption. The question is: should public interest prevail over private profits?” – Supreme Court Ruling on G.R. No. 141314, November 15, 2002 written by then Associate Justice Reynato Puno.

Ambassador Allistair McDonald of the European Commission notes that one of the major reasons why the Philippines is not attracting as much foreign direct investments as other countries is it high rates of energy.  In is speech at a business forum, the Ambassador bluntly declared: “The price of electricity is higher in the Philippines than almost any country in the region.”

The Manila Electric Company is the largest and oldest distributor of electricity in the Philippines.  It supplies electricity to a franchise area covering nearly 10,000 square kilometers with a population of around 20 million.  The company serves four million customers in 23 cities and 88 municipalities in Metro Manila, Bulacan, Rizal and Cavite and parts of Laguna, Quezon and Batangas.  This is known as the industrial enclave of the country.  Imagine that Meralco produces 50 percent of the Philippines’ Gross Domestic Product (GDP)!

It is thus a gargantuan company imbued with the public interest since it is operating a public utility obligated by law to “ensure transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability.” 

 So, why does it seem as though the Lopez family is running Meralco like a personal empire? The general impression is that the Lopezes milk financial benefits from Meralco for the family’s interests. Yet the Lopezes own only 26.82 percent of Meralco through the First Philippine Holdings Company, which they control.  The Philippine government, through government-owned and controlled corporations, owns 28.2 percent of the corporation.  Other stockholders, corporate or individual, hold the rest of the shares.

The failure of Meralco to keep electricity rates in the Philippines on a competitive level with those of other countries shows that it has failed to keep faith with its franchise to serve the public interest while making only “reasonable” profits. 

No less than the Supreme Court (in G.R. No. 141314) ordered Meralco to reimburse its millions of customers for overcharged rates amounting to P30 billion.

Meralco critics charge it with other “frauds” like buying power at higher rates from Lopez-owned Independent Power Producers through sweetheart contracts, breach of contract with the National Power Corporation (Napocor), illegally charging customers with billions of pesos in “systems losses” which are entirely due to management’s inefficiency, tax evasion and other financial shenanigans.  In fact, a Meralco consumer has sued the firm in Pasay City for “market power abuses or anti-competitive or discriminatory act or behavior” in violation of the Electric Power Industry Reform Act or EPIRA.

Concerned for the welfare of electric consumers and also worried about the non-competitiveness of the Meralco rates, the President has directed the Department of Trade and Industry to appeal to the Energy Regulatory Commission to compel Meralco to lower its rates.

Winson Garcia, president and general manager of the Government Service Insurance System, has asked Meralco to open its books and submit its documents to full scrutiny by the public and its stockholders in the spirit of transparency.  Garcia sits in the firm’s board of directors as representative of 1.2 million GSIS members who are major stockholders of Meralco.

However, the Lopez-controlled top management of Meralco has refused thus far to open its books of accounts and operations, prompting Garcia to threaten to file charges of fraud, estafa and breach of franchise provisions against Meralco. This violates the EPIRA law mandating that franchisees be transparent and accountable.

Meralco has also entered into what some suspect to be sweetheart contracts with IPPs owned by the Lopezes at prices higher than those charged by the NAPOCOR. Meralco critics hold that if Meralco bought all its power from Napocor then consumers would fully enjoy the mandated rate reduction of thirty centavos per kilowatt-hour required by EPIRA; Meralco counters that the Lopez IPPs actually reduce the over-all cost of electricity.

Clearly, though, the Lopez management of Meralco has failed to comply with its franchise obligations to the Filipino people.  Perhaps, a new management team is needed to step in.  In the meantime it should open its books and other documents to its own stockholders and the general public for a full accounting of its operations.  This may be the only way that trusts in the Lopez family and Meralco can be regained.

Let not Manila Rep. Amado Bagatsing be proven right when he says about Meralco:  “This is a fight between the common people of our country against corporate greed.”

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hvp 05.12.08)

Readers who missed a column can access www.duckyparedes.com/blogs. This is updated daily. Your reactions are welcome at duckyparedes@yahoo.com

“Noli’s problem is understandable. He would be an unknown if the Lopez family that controls Meralco had not picked him to be the premier newsreader in ABS-CBN.”

 

by Ducky Paredes

 

The silence of Vice President Noli de Castro as the reality of the unconscionably high power distribution rates of Meralco sets in to the public consciousness would be understandable if he were no longer interested in public office after his term ends in 2010.

If he has further ambitions to remain in office, he ought to speak up. First of all, it is becoming clear that most of his political allies and his main political patron – the President – are one in showing an interest in how to bring down what we pay for electricity.

Second, our high rates (among the highest in our part of the world) have been among the negatives whenever anyone considers investing in this country.

Noli’s problem is understandable. He would be an unknown if the Lopez family that controls Meralco had not picked him to be the premier newsreader in ABS-CBN (another Lopez company). Noli was then a nobody. After he started voicing the TV news, he became an instant celebrity.

(Another politician who took the same path to fame was Senator Loren Legarda and while she has also been silent on the present issue, she has already shown her independence from her former employer in many ways.}

GSIS President Winston Garcia who (through GSIS) controls 30 % of the shares of Meralco wonders why Meralco charges its Luzon customers more than what power distributors in his native Cebu are charging their customers. Winston, as a shareholder, wants to know why this is and demands that the books of the company be opened to him. Meralco has refused saying it cannot trust Garcia not to divulge company secrets to its competitors and the government.

What is really keeping the Vice President from taking up the cause of the millions of poor Filipinos suffering from high food and power prices? Noli says that these poor folk voted for him in 2004; if they actually did, shouldn’t he now take up their cause? Should he just allow them to suffer higher power rates without even asking Meralco to explain it?

Or is Noli, after all these many years as a senator and the country’s No 2 man still beholden to the Lopezes? Is he hoping that the family will still help him become President in 2010?

Quezon Rep. Danilo Suarez speaking about opposition congressmen says: “To defend Meralco, whose high rates are making life doubly hard for our people, runs against the grain of many of my colleagues’ avowed stance in the past.

“Thus, I am puzzled why they have dropped their populist positions all of a sudden to defend Meralco by mouthing its line that the government is out to wrest control of the company.”

The same observation can be made about our Vice President.

Manila Rep. Amado Bagatsing says that the fight over Meralco is one between “the poor and corporate greed, and transparency against keeping Filipinos in the dark on why they are saddled with the highest electricity rates in Southeast Asia.

 ”There can be no fence-sitters in this issue. Either you’re with our long-suffering countrymen or you’re not in this battle royale. I am, thus, bewildered why self-proclaimed pro-poor politicians are suddenly defending Meralco.”

 Bagatsing stressed that those who have less in life should have more in law, thus he is moving for the repeal of a law – Republic Act 7832 – which he said is being used by Meralco as an excuse to hike power rates.

 RA 7832, or the Anti-electricity and Electric Transmission Lines-Materials Pilferage Act of 1994, allows power distributors like Meralco to pass on to their customers up to 9.5 percent of their so-called systems losses.

 Systems losses refer to electricity lost to pilferage and its inefficient distribution.

 Bagatsing explained that RA 7832 is a “class legislation” in that it allows power distributors to recover losses by passing them on to the public, something which is not available to other utilities: “This law penalizes the people for the incompetence of power distributors like Meralco to crack down on pilferers and their inefficiency in distributing power.

 ”RA 7832 has to go. It rewards corporate inefficiency while penalizes consumers over things that are no fault of theirs.”

 In 2003, the Supreme Court found Meralco passing on to its customers its income tax charges from 1994 to 2003. The high court promptly ordered the company to refund its customers P30 billion.

 The following year, the Supreme Court again stopped Meralco’s collection of a provisional increase, which was not subjected to public scrutiny.

 Thus, whatever Meralco does now, it is fair to assume that (having been found out before to be doing so) that it could again be in violation of ethical practices.

National Labor Union (NLU) president Dave Diwa chimes in with this observation: “Vice President De Castro cannot wait for a script to read because if one comes his way from the Lopezes, it would surely run against the interest of the people who he claimed voted for him. 

“It’s a make or break situation for him, and he cannot keep mum on it.”

* * *

From a American veteran who fought World War II in the Philippines comes this bit: “Your article on ‘white Pinoys’ reminded me of once when I was at a fiesta in a barrio in Cebu, We were playing softball and the umpire said to me: ‘Mr. Steve, do you know why the Filipino is brown?’

“I said no. He proceeded to tell me that when God made man, he made him out of bread dough and put him in the oven to cook. After 5 minutes he took him out and said,  “He is too white.” He then made another man out of dough and put him in the oven and raised the heat and after 20 minutes he took him out and said,  “He is too black”. He then made another and put him in the oven and reduced the heat and took him out in 10 minutes and took him out and he was a nice brown and the Lord said: ‘Perfect!’ 

“I do not think that your legislators are colonially minded; I know that they are Dollar minded.“

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hvp 05.11.08)

Readers who missed a column can access www.duckyparedes.com/blogs. This is updated daily. Your reactions are welcome at duckyparedes@yahoo.com

“Is there a desire in the Pinoy psyche to be white? There are so many Philippine products that sell on the claim that it will give the user whiter skin. Why is this?”

by Ducky Paredes

 

Are we anti-Asian of are we just socially closer to Europe and America because of our colonial past? Is it a carryover from those times that we sometimes seem to prefer things western to things that are Asian?

Or are we just mindlessly following whatever we see are the fashions and likes of the white men? Is there a desire in the Pinoy psyche to be white? There are so many Philippine products that sell on the claim that it will give the user whiter skin. Why is this?

Do we hate the original kayumanggi skin of the Filipino that a lot of foreigners love so much?

Certainly, even our legislators seem to prefer foreign to local as in the laws that they write for automating our elections. We will be trying out in the elections for the autonomous Region of Muslim Mindanao (ARMM) three months from now several machines using different technologies but all coming from outside the country.

Other countries automated their elections such as India and Korea. Did they use foreign machines? No. They developed their own and have succeeded with them. Here, in order to qualify, the machine should have been used in automated elections over several years with so many million voters using them.

In order to qualify for that, a Filipino inventor would have had to develop and election machine, sold it to another country, which would have used it over several elections before bringing that machine back to the Philippines so that it can qualify under the rules written by our legislators.

Our own legislators write laws that exclude Pinoy techies from the bidding. How smart is that?

This is part of the leavings of our colonial masters – a lack of belief in the Pinoy and an over-reliance on the wonders that come from the western world.

In computers, we are at least at par with the rest of the world. We have very good to excellent programmers and other technical person who could (and have) created systems for automating our elections but who are not given the time of day by our legislators.

One was even called a “braggart” by a congressman for having the temerity to prove that his system was superior to what the congressman was apparently pushing. (Perhaps, he will make a small commission of the deal if the system he was pushing can be sold to the Comelec.)

Sadly, the reality is that our own congress (and our congressmen) has no real love for this country and its people. Wouldn’t the proper thing to do be to push for Pinoy developed systems to use in our own elections?

But, no, they will not do that. Why take a chance on something local when one can buy something similar from other countries? The presumption of our colonially minded legislators is that if something is made outside this country, it has to be better than anything that Pinoys can invent, manufacture or do.

Should we wonder why this country is not going anywhere?

* * *

There is an issue regarding the decision of the Manila City Council that was backed up by the Supreme Court that will greatly affect investors in this country.

When the City Council of Manila decided that the oil companies must relocate from the Pandacan Oil Depot that they have been using since before World War II, they created a legal pickle. What the council did is called “spot zoning.”

It re-zoned a small part of the city to suit the current situation. Pandacan was always an industrial zone. It was that when the oil depots were set up in the area. That there were a lot of squatters around the oil depot and that the city grew around the area to the point where the council considered that a terrorist attack on the oil facilities could wreak great havoc on the city and have a death toll that could surpass the 9-11 terrorist attack on New York.

Thus, the council, in effect re-zoned the Pandacan oil depot site to get that dreadful possibility out of their minds.

First of all, they should have considered other things such as what it would cost to relocate that depot. If oil prices are now so high as to be almost unaffordable, the relocation will increase costs even more since what is now cheaply moved by pipeline will have to be trucked, amore expensive proposition. Trucking our oil supply into the city will also increase the traffic coming into Metro Manila.

But the greatest loss would be the country’s credibility to our investors. Imagine that one could invest millions in, say, a warehouse, which a succeeding elected administration might rezone into one where no warehouses are admitted.

Actually, this is also happening in other places. Why are schools, for instance, allowed to be built in what ought to be purely residential areas?

In the case of the Pandacan Oil Depot, this was originally in an industrial zone and the residential area simply grew around it. So, why should the Oil Depots now be the one that has to leave the area when it was there before all of those houses?

Of course, people will go where they can and if there is money to be earned somewhere, the more that they will congregate in that area. Still, considering that when one buys an industrial site, the normal way is to invest the area with more machinery, equipment and facilities as the years go by.

One realizes that Pandacan would probably be a nicer place if the depot was not in the area, the reality is that if the depot had not be there, the whole neighborhood would have been taken over by squatters and would be an even uglier and m ore dangerous neighborhood than it now is.

* * *

Selling Petron to the Gokongweis, a family with interests in petrochemicals and an airline makes more sense than giving it to Ashmore, a financing firm. Who would run it for Ashmore so that its 40 percent is protected?

As it is, Petron has so many problems – tax debts, suits from Bataan province and a host of other problems, including allocating millions to move its oil depot out of the Pandacan area that the smartest thing to do with it is what Aramco did – find someone who will buy them out.

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hvp 05.08.08)

Readers who missed a column can access www.duckyparedes.com/blogs. This is updated daily. Your reactions are welcome at duckyparedes@yahoo.com