Tuesday, May 13, 2008

Paranoia and high stakes bluff

This was my column yesterday.

The unexpected twists and turns in the ongoing soap opera featuring Manila Electric Co. and the Government Service Insurance System—or between the Lopezes and the Arroyo administration, if we are to believe some overactive and malicious minds out there—underscore the very fragile state of affairs in this country. It does look like most of us are suffering from a terrible case of paranoia that makes us automatically suspect the worst in others.

In ordinary times, concerns over runaway rates of a basic necessity such as electricity should have merited groundswell support from various sectors. Except for those who are associated with the power industry, who in this country does not want lower electricity rates? So at the very least, we should have had an enlightened, collaborative, problem-solving approach to the electricity imbroglio. What happened instead was that people allowed paranoia to prevail over their better judgment. Instead of getting down to the roots of the issues and contributing to the quest for a win-win solution, most preferred to ascribe various motivations to the actions and statements of the parties involved.

The government was accused of masterminding a takeover of the biggest power company in the country. Some sectors went as far as accusing the government of waging a vendetta on the Lopezes on account of the very negative press it had been getting from Meralco’s sister company, ABS-CBN. Both were speculative drivel, but at the rate these accusations were being repeated, it didn’t take long before they began to sound like Gospel truth.

Meralco, on the other hand, was accused of corporate tomfoolery, which could be summarized in this way: Sustained and massive swindling of consumers. If we are to believe the government’s spin on the issue, the reason why power rates in Luzon are higher than those in the Visayas and Mindanao is because Meralco has been passing on to consumers a number of hidden charges and costs and that Meralco is mismanaged.

The accusations sent analysts into overdrive, spinning all kinds of conspiracy theories and doomsday scenarios. As expected, politicians jumped into the fray to stoke the conflict into becoming a major conflagration. What was a relatively simple issue of bringing electricity costs down has become an occasion for intense saber rattling and high-stakes bluffing. Consequently, it has metamorphosed as fodder for our favorite national pastime and source of entertainment—a congressional inquiry.

The business sector was expected to rally behind any campaign to bring down electricity costs. After all, hasn’t business been riling endlessly about how the prohibitive cost of electricity in this country was making it hard for its players to turn in a decent profit? So when the President’s pitch to the business sector enjoining everyone to join in the quest to bring Meralco power rates at par with those in the Visayas and Mindanao fell on deaf ears, eyebrows were raised. How can the business sector ignore something that is supposed to be beneficial to it?

Lower electricity rates benefit the poor; any effort to make life easier for the masses is bound to get the support of the hearts that bleed for the poor in this part of the world, right? Up until last week, it was unthinkable to imagine Bayan stalwart Teddy Casiño as a fierce defender of capitalists and big business. Casiño, Liza Masa, Crispin Beltran and the other party-list representatives in Congress are supposed to be anti-capitalist and anti-big business. They are supposed to be for the nationalization of major industries in this country so the ballyhooed takeover of Meralco by government should have sent them into somersaults. But our leftist friends in Congress are instead ferociously defending Meralco and the Lopezes.

The problem is that we have a government that has very little credibility, particularly in terms of good corporate governance. Because of a dismal track record in upholding transparency in government dealings, government has very little moral authority to preach on the matter, particularly to the business sector. And unfortunately, big business is aware of this predicament and is taking full advantage of the situation by deliberately being defiant. It’s a lose-lose situation for government.

It doesn’t help, of course, that government has also been unclear about what its real agenda is—what it really wants and how, or up to what extent, it is willing to go to get what it wants on the issue around electricity rates. To complicate things further, people in government continue to sing in discordant voices. Is this really simply about lowering electricity rates, or is there more than meets the eye? Is a takeover of Meralco part of the plan? Is GSIS really acting on its own accord, or is the government behind the saber rattling? No one knows because no one is giving straight answers, which leads many people to suspect that it’s all a bluff.

It is also very tempting to picture Meralco as the proverbial big bad (greedy) wolf in this whole scheme of things. It is a profitable business enterprise, although, to be frank about it, not as profitable as it should be given its assets. It also happens to be one of the leaders in the industry in terms of compensation and benefits— Meralco is renowned for having the lowest employee turnover rates in the country as hardly anyone resigns from the power firm because of its long history as a good provider for its employees.

But is Meralco passing on charges to its consumers in violation of legal and ethical rules? This is a valid question that Meralco refuses to answer in a straightforward manner. Meralco is preventing GSIS, which, together with other government agencies, owns 33 percent of the firm from taking a look at its books.

The truth is that Meralco has a lot of explaining to do to its stakeholders. It is benefiting from the generally low credibility of this administration, but there is a limit to how much it can shield itself by conjuring legal gobbledygook. At the end of the day, Meralco is answerable to consumers as a public corporation that thrives on its image as a responsible corporate citizen. It must aspire to be honorable even if others are not; even if the government is not.

All this talk about a takeover is really smoke-and-mirrors. Anyone out there who thinks a takeover is a viable option must be extremely naïve. The Lopezes may be sick and tired of all the regulatory restrictions that come with managing a public utility company, but aside from the fact that Meralco is a crown jewel in the family business empire, it also happens to be a firm that is closely tied in to the family’s history and legacy. Meralco is not just a business venture for the Lopezes. And anyone who thinks that the government can successfully conduct a corporate raid at a time when people—particularly businessmen—are edgy is out of his mind. It’s not going to happen.

So let’s keep the discussion focused on what is real, doable and relevant: Keeping electricity rates down. It’s an issue that is valid and which requires effective responses—both short-term and long-term. Surely we can do better without resulting to high stakes bluffing and giving way to paranoia.

1 comment:

Gina said...

Prepaid electricity- why not? It sounds like a smart idea. That way, nga consumers are more aware and more careful of their usage. Kudos to the one who came up with the idea. If it's working- it should be emulated by the rest of the country.