Energy chief moves to finance

President Arroyo transferred yesterday Energy Secretary Jose Isidro Camacho to the finance portfolio effective June 15.

Camacho will assume the post to be vacated by Secretary Alberto Romulo, who is to assume the post of executive secretary vice Renato de Villa who recently underwent heart surgery.

Presidential Spokesman Rigoberto Tiglao said Camacho will have to stay at the DOE until mid-June to ensure the passage of the long-pending Omnibus Power Sector Reform Bill.

Romulo will assume his Palace post right after the Cabinet meeting on May 22, Tiglao said, adding that an unspecified government position awaits De Villa who is still recovering from surgery.

Camacho was a career international banker who had been managing director and chief country officer of the local branch of Deutsche Bank AG and also had several stints with investment banks in Tokyo, Hong Kong and New York.

He is the richest Cabinet member with a declared net worth of more than P329 million as of Feb. 28, 2001.

He assumed the energy portfolio on March 5 and his main task would be to curb the national government’s budget deficit, which is expected to range between P145 billion and 225 billion this year.

"Indeed, we have to improve our fiscal discipline in terms of (better) tax efforts," Mrs. Arroyo said in a statement.

"But at the same time, I would also like to have in the medium and longer term those improvements in the tax structure itself," she added. The President had initially wanted to appoint Trade and Industry Manuel Roxas II to the finance portfolio because of his extensive experience in investment banking.

Roxas was to have been replaced by Interior and Local Government Secretary Jose Lina who was to oversee the government’s small and medium enterprises (SME) development program.

But Roxas reportedly has problems in divesting some unspecified assets.

Romulo, for his part, welcomed Camacho’s appointment which becomes effective June 1.

"Camacho is well qualified for the position. He is well-known in both the local and international financial community and he will be in the best position to look at all our financial needs," Romulo said.

With Camacho’s appointment to the finance portfolio, Roxas and Lina are expected to be retained in their present positions, leaving an opening in the energy portfolio.

Palace sources said the position would likely go to energy industry veteran Jesus Alcordo, who was reportedly the President’s first choice for the energy portfolio.

But Alcordo yielded to Camacho after some sectors objected to his appointment. Alcordo’s critics, however, appear to be standing down especially after they mistakenly asked the President to make unacceptable changes in reform measures for the energy sector.

Other candidates are former Social Security System president Renato Valencia, Napoleon Nazareno of the conglomerate Metro Pacific Corp., Energy Undersecretary Cyril del Callar and PNOC Exploration Corp. president Rufino Bomasang.

Camacho’s experience in the energy sector is also expected to boost legislative measures which have been pending for at least six years, and pave the way for the inflow of vital financing facilities.

Foremost among these reforms is the new power bill that the administration hopes to pass in a special congressional session that would supposedly be called on May 29.

In a video link dialogue with foreign investors, the President confirmed she would push for the passage of the reform measure during the current Congress.

"Even before the new Congress convenes in July, we will push for the ratification of the power restructuring bill by the incumbent legislature," she said.

The measure has undergone several transformations in both chambers of Congress and is now at the bicameral conference committee which is still deliberating two important components of the law, such as the creation of the Energy Regulatory Commission and the stranded costs of independent power producers (IPP) contracts.

Pitching for the passage of the new power bill, Camacho told the Metro Bacolod Chamber of Commerce that "power rates to residential end-users will automatically be reduced because of a mandatory 30-centavo cut per kilowatt-hour provided in the bill."

Camacho admitted that the country has one of the highest electricity rates in Asia and warned that if the status quo is maintained, power rates can never be expected to go down.

"The National Power Corp., at the moment, is already $6.7 billion in debt and is 90 percent leveraged. And since Napocor is the dominant player in the industry, power rates pretty much reflect the cost structure of the power firm.

"By transferring Napocor’s assets to private hands, the capital structure immediately improves. In addition, these assets will now be managed more efficiently," Camacho said. — Paolo Romero, Donnabelle Gatdula, Rocel Felix