While we are all very much involved, discussing Jojo Binay’s fate or the latest old face addition to the incoming Aquino administration, several naughty and devilish businessmen are out making a killing.
INQUIRER WRITES IN ITS OPINION PAGE TODAY:
WHAT CAN ONE SAY WHEN A REGULATED public utility, after earning a huge profit, comes around a few days later asking for an increase in its rates? This was precisely what Meralco did on June 18, 2009 when it went to the Energy Regulatory Commission (ERC) to seek approval for its “annual revenue requirement and performance incentive scheme” which would have the effect of raising its distribution, supply and metering charges at least once every year from 2012 up to 2015. Three weeks earlier, it had proudly announced it earned P2 billion in profits during the first quarter of this year, or 135 percent more than its profits for the same period last year. Very few firms in the Philippines can boast of such earnings in three months, or even in a year. And it smacks of greed that the petition comes on the heels of two successive increases (granted in May 2009 and May 2010) as well as another increase next year.
ANSWERS:
1. UNBRIDLED GREED. I don’t care if Manny V. Pangilinan now heads this public utility nor that the Lopezes retained their chairmanship. The fact simply is—PURE GREED. We now have the highest electricity rates in Asia. I know that MVP wants to always be Number One. But, please, don’t make us the No. 1 county with the highest electricity rates in the world. That’s sickening.
And I don’t care if Noynoy Aquino vows to run after grafters in government. Why shift the focus and run after big business executives who are making a killing in the public sector? These people are acting as if they own the whole country. They are running amuck, careless and simply wants one thing—steal someone’s peso. They are equally worse than grafters.
Noy, would you go and arrest these sonafabitches?
2. KAKAPALAN NG MUKHA. I really don’t care if Manny V. Pangilinan and his PLDT cut my Internet services after this but I can’t simply allow such things to happen. You already got 2 billion pesos in profit, what else do you want to do? Double it at the expense of the public? That’s plain and simple, callousness.
The question really is—will the new administration do something to help the Filipinos and moderate Meralco’s greed?
3. SOUL-LESS CAPITALISM AT ITS BEST. I simply don’t care that Manny V. Pangilinan and his bosses over at Kuala Lumpur wants my head delivered on a silver plate but this is pure and simple wagging tongue capitalism. The salivation is simply too much to bear. Meralco is salivating for the few pesos we earn every month. What do you call that but the acts of a fiendish capitalist.
And I simply don’t care if Manny V. Pangilinan led this “Ako Mismo” campaign nor supported President Benigno Aquino III or whoever he supported during the last elections. The fact simply is, MVP, for me, means Malaysian Valet is a Pilipino. Too much kowtowing with his Malaysian principals, too little care for the Filipino. But, as they say, its all business, nothing personal.
Well, if that’s the case, then, let’s militate and push these greedy people out of our country fast. It can be done. It will definitely be bloody but hell! Better to have them out here than them frying us with our own body fat….for the next six years! And I simply don’t care if Noynoy Aquino nor the incoming administration have a former Lopez or a former Ayala executive at the helm of the energy and public works department. A just cause simply is worth sacrificing one’s life.
Popularity: 1% [?]
“A just cause simply is worth sacrificing one’s life.”-Pat
I’m with Pat here.
But Manny V. Pangilinan contributed P15 million to Erap’s campaign kitty and none to Noynoy’s so MVP might have thought Erap would win and he can get away with shackling the Filipino people with his and his Malaysian masters’ greed. He erred. It’s not Noynoy’s fault that he erred. MVP’s greed is not Noynoy’s greed. And so I hope.
Still, PGMA has few more days to be around. For her penchant for midnight dealings, maybe she can still make this power rate increases a final midnight deal with Manny V. Pangilinan. I suppose, few more days, even a few more minutes, is never too late for the greedy, who knows.
hey pat, understand your feeling.
its not appropriate for govt to take or allow such steps.
in long run it may hamper the overall economic growth.
Corporations are in business to benefit their shareholders. The problem is enrichment in an unfair playing field that punishes the public. A second problem is regulators who are in bed with those they regulate. In a nation that is anchored in the “trade of favors”, you get a MERALCO, or a PLDT, or an ABS-CBN running an obscene number of commercials.
I would not focus energy on condemning the greedy, but condemning the regulators who allow such abuse of public resources and needs.
It is the nasty trade of favors. It must be broken so that fairness and value dominate the economic landscape, not “what’s in it for me”. The trade of favors is the foundation of corruption.
joe am,
Sometimes, I wonder if the business sides of the capitalist, are turning this whole country, “the world” for that matter into, or becoming a socialistic society.
There is nothing wrong for a utility company to earn profits from its investment. What is utterly wrong is ERC’s policy of allowing the distribution-transmission utility companies(DTUC) to earn and recover its investment based on the premium on its cost of money. Under the Return on Rate Base (RORB) method the electric utility company is not allowed to recover the corporate income tax from its customers.Also, a cap of 12 % is imposed thus, effectively the profit a utility company earns is capped at around 8%. Not bad considering that this is an assured or riskless earning. The idea is for a utility company to source aggregate funds lower than 8%.
In the meantime, ERC issued a policy for DTUC the Performance Based Reulation(PBR) method ehich admittedly simplifies the rate regulation process because the rate will only be set once and rate increase will be based on performance improvements for the following regulatory period. The catch under this method, is that ERC allowed the DTUC to include the corporate income tax and worst, lift the 12 % cap on profits. Therefore under the PBR, DTUC earns even more than 15 % return.Very very good for them and ver yvery bad for us.
My take on the bottom line is to limit the rate of return to at least the current market rates of 5 to 6 % no matter waht method is used. Why because the utility business is riskless, assured and no competition or in the future the DTUC bid for the lowest rate of return.
This is like saying that there is nothing wrong with greediness as long as the regulators are allowing it, heheh.
Bert,
So what’s best, CAPITALISM or SOCIALISM !
This is how “Dictionary.com” translates these two words.
Can GREEDINESS come into play with these two words. Of course.
mario,
Villar’s greediness were allowed by the regulators DTI and the Central Bank, look what he’d got during the election…4 million votes, :). And look what happened to the socialist candidates under the NP…they lost in the election.
That means that the Filipino people detest greed of all forms. I hope that satisfy your question.
Wrong on two counts. Check out the PBR formula.
One, RORB was based on a rate base derived from a DU’s booked values in the balance sheet. PBR is based on depreciable expenses in the income statement.
Two, RORB was based on net profit after taxes (NPAT). PBR is based on net income before taxes (NIBT). Thus, no taxes are involved in PBR’s tariffs.
The utility business is NOT risk-free. No business is.
Dean
The last time I was involved as rate making process, ROBR is calculated on the total of investment in utility assets plus two months operating expenses. Problem is, these two items are padded on purpose with non-capitalizable expenditures and expenses unrelated to operations. Without appropriate audits the rate making process in the Philippines is nothing but a dictation by the utility operators. This explains why MVP is all over the place – telephone, water, electricity, toll, etc.
As Gordon Gekko, of the film “Wallstreet” had stated: “For lack of better term: Greed is good. It works.” Are you surprised on these multi billion compsnies are like a vortex? Gorging on the money of its suffering consumers?
mario cruz,
Alam mo kasi, yung mga kapwa natin ay, walang gamay sa socialistic organization nila, at kung puweda lang mag lagay sa investment stock nila. Di ba mayroon na silang share sa socialism organization nila.
While they gorge on the vortex of interest, sa mga poor pinoys in pinas.
Then your set for life, to say the least.
Anthony Salim is Indonesian.
Meralco and PLDT are your typical Pinoy monopolies who with their moolah have a stanglehold on the balls of politicians and regulators alike. If you think that Meralco charges the highest rates in Asia, so is PLDT. Come this side of the ocean and you will see long distance rates to Pinas anywhere between 10 to 13 cents per minute. It is embarrasing when India, Sri Lanka and Bangladesh charge less than the Pinas rates. People seem to think that Pinas is way behind in technology compared to these countries when in fact it is not. It boils down to corporate greed and lack of regulation.
Correction : It is embarrasing when India, Sri Lanka and Bangladesh charge less than the Pinas rates.
It should read : It is embarrasing when India, Sri Lanka and Bangladesh charge less than half the Pinas rates.