A test of President Noynoy's good governance

Meralco’s high electricity bills is an issue of concern for everyone. But it is not given the attention it deserves because the most pervasive media in the country — radio and television — are also owned by Meralco’s owners.

Every once in a while there is a surge of complaints from consumers but interest soon dissipates because there has been no concerted action on the part of both government and citizenry to confront the issue that is at the bottom of our poverty and backwardness. During the bruising fight with the Arroyo government consumers were taken in by media pronouncements that this is about a political fight between the government and Opposition.

This was especially true during Marcos’ and Arroyo’s governments but not during the first Aquino, Ramos and Estrada governments. Marcos and Arroyo took on the Lopezes head on. Cory Aquino was an ally against Marcos, Ramos used indirect tactics and well, Estrada’s daughter was married off to a Lopez.

Arroyo’s determination to break the Lopez monopoly was interpreted as political vendetta that goes back to many years when former President GMA’s father had an equal run-in with the Lopezes. That was, of course fatal for Macapagal. The Lopezes who were kingmakers in the political scene and soon formed the Marcos-Lopez team to defeat him. Paradoxically, Arroyo’s more determined attempt to help solve the problem of high electricity costs was the first casualty of the politicization of the problem. Here is another area where the present government could lay the ground for better laws on public services. In this case the unholy alliance of media and electricity should be questioned and reformed.

*      *      *

We need a more studious study of the problem. Unless Meralco’s higher electricity bills is seriously addressed by President Noynoy, it will contribute to the people’s disenchantment with his government that was elected because of its pledge to bring political and economic reforms. As far as consumers are concerned, they have electric bills they cannot afford and they are riled that the power firm should announce its huge increase in profits at the same time.

How are we to reconcile reform-minded governance with the situation of higher electric bills and bigger profits for Meralco? There is obviously a problem that needs to be addressed.

President Noynoy, I am afraid, is caught in a bind because Lopez media’s support had helped elect him president. The problem will test his patience but as president of all Filipinos he must address their concerns. He cannot opt out of that obligation.

I am not an economist nor a businesswoman but here is a gut issue that I can understand: we have allowed a private corporation, virtual monopolies, to take hold of two public services — electricity and media — that collude with each other to keep their power (excuse the pun).

*      *      *

“Ultimately, it is the president, his person, character, vision for the country and ability and willingness to spend political capital — who can muster the national consensus, clear roadblocks and drive the reform agenda forward,” writes Romeo Bernardo in his paper, “The Political Economy of Reform during the Ramos Administration (1992-98). In this paper he tackles three reformed sectors – water, oil and telecommunications ­— in which the Ramos government worked out needed reforms.

Bernardo traces how former President Fidel Ramos tackled the “roadblocks” by having to make decisions against his own personal friends. If necessary, Ramos “sacrificed personal friendship in taking on the Cojuangco clan in PLDT.” But it has paid off.

His report on the three problem areas reformed during the Ramos presidency showed that it could be done even in the difficult political setup of the Philippines. Rather than cave in to what seems unwinnable challenges, Bernardo’s paper says that “arguments against reforms should be seen as part and parcel of the process.”

“Because of the reforms, government has moved away from the role of provider to that of an enabler and regulator,” Bernardo writes.

For electric consumers who coaxed me to write on this issue, their main argument is that Meralco’s increased earnings have gone way beyond the 10% profits allowed by law for a public service. Here is a clear violation of the law. Let’s focus on that.

But as the same friend told me, how can we expect the government’s regulatory body to take our side when we do not have the resources of Meralco? By resources he included politicians and media. I can see his problem and I suppose all Meralco consumers on how to put the case before government if its own officials including the President, are hobbled by favors owed and political considerations. The answer, according to Bernardo, if I understand him correctly, is for consumers to continue nevertheless with their advocacy, inching through reform rather than ramming it through with shooting guns ablaze.

“To make some of the reforms possible government has had to accept less-than perfect second best solutions to the regulatory setup,” he said. The quotation from Voltaire that President Obama uses when faced by difficult situations “Perfect is the enemy of good” is very apt. So we should go for less than perfect solutions in the meantime. Indeed, there is much to be desired about how regulatory bodies do their work and this is where reforms can be made without having to break the Lopezes.

Bernardo writes about how “there has been a lot of learning about utility operations, market dynamics and public response among others – over the past 10 to 15 years. These follow many challenges to existing rules, especially in the water and telecommunications sectors to aid regulators going forward.”

Let us see how President Noynoy will tackle the higher electricity costs given his relationship to the Lopezes. If nothing else works, electric consumers do have a weapon they can control – use less electricity or resort to other forms of energy. There is no reason why alternate sources of energy like solar panels and windmills cannot be used to save on electricity and water. Meralco’s high electricity cost may be the catalyst we need to stop our wasteful use of electricity and water.