Indebted
FIRST PERSON - Alex Magno (The Philippine Star) - February 25, 2020 - 12:00am

One part of our government remains mired in the debt crisis that sent the economy into a tailspin during the 1980s. That part is the Power Sector Assets and Liabilities Management Corp. (PSALM).

A large part of the government debt that produced the crisis was due to the heavy borrowings of the National Power Corp. (NPC). The debt ballooned when government, trying to buy popularity, did not pass on the true cost of power generation to the consumers.

When the NPC became financially unsustainable, government began privatizing power assets. With the passage of the Electricity Power Industry Reform Act (EPIRA), the remaining stranded debt and assets were transferred to the PSALM. The agency was tasked with working down the debt using fees charged players in the largely privatized energy sector.

That is an almost impossible mission. Still, PSALM soldiered on, working down the debt from P1.3 trillion in 2003 to “only” P424.8 billion by September 2019. In order to manage the outstanding obligation, PSALM borrows to service maturing obligations.

Servicing the outstanding debt is not cheap. In 2018, PSALM had to pay P3 billion in interest and other financial charges. That, understandably, upsets the Department of Finance – especially since the PSALM could do immensely better if it promptly collected money owed it by independent power producers and electric cooperatives.

Recently, Rep. Michael Defensor filed a resolution to look into the financial standing of the PSALM and inquire into reports political influence was used to evade prompt payment to agency. The House committee on public accounts chaired by Defensor and the House committee on good government and public accountability chaired by Rep. Jose Antonio C. Alvarado conducted a joint hearing on the matter last week.

The hearing brought out the fact that a number of power producers and electric cooperatives owed the PSALM up to P100 billion in delayed payments. Some of these delayed payments are due to the pendency of court cases over the correct interpretation of the charges.

Until those court cases are resolved, the payments will remain delayed. Government will continue to shoulder the financing charges of the PSALM’s outstanding debt.

Strangely, the House committee on energy was not a participant in these crucial hearings. Marinduque Rep. Lord Allan Jay Velasco chairs this committee.

The inactivity of the Velasco-led committee of energy is perplexing. The financial viability of the PSALM, after all, obviously touches on our energy security.  PSALM’s predicament regarding mounting receivables could require a review of the EPIRA provisions.

Also, Velasco is supposed to be Speaker-in-waiting, given the term-sharing arrangement forged earlier. As such, he ought to be actively involved in pressing issues such as this one that might require legislative intervention.

Velasco’s inactivity, some say, may be due to conflicts-of-interest hampering his work as a legislator.

Long-drawn

Justice, it seems, has been long in coming for Filipino employees involved in a legal dispute with a giant international bank.

In 1992, an international bank with local presence implemented what it euphemistically called a Job Evaluation Program (JEP) that resulted in lowering the pay scale for Asian employees. The governments of Indonesia and Japan immediately issued official statements expressing displeasure at the bank’s treatment of their citizens. The Philippine government took no position.

As a consequence, Filipino employees took only a fifth of what an equivalent colleague in Japan received.  The Filipino employees wanted the matter included in what was then an upcoming collective bargaining negotiation. The British management rejected the demand and dared the employees to strike – apparently emboldened by their close connections to the politically powerful.

On Dec. 22, 1993, 160 Filipino employees went on strike. The bank’s management responded by hiring scabs who entered bank premises wearing college uniforms and escorted by Makati policemen.

The bank then made a show of airlifting their British officers despite the picket being absolutely peaceful. The police then broke up the picket, claiming the workers had tried to enter bank premises.

Confident of their political connections, the bank hired a powerful law firm, aiming to foreclose the properties of the striking workers. Individual criminal cases were also filed against the union members. Notwithstanding the absence of clearance from our Department of Labor, the bank published the names of the striking employees in leading newspapers with the intent of impeding their hiring by other enterprises.

The event took a human toll on the strikers. One succumbed to kidney failure, unable to afford medical care. The child of another unionist suffered severe depression as a result of sudden change in the family’s finances. Another union member, who looked after his poorer siblings, died after jumping from a jeepney to protect his wallet from thieves.

By 2000, the union members had no recourse but the courts. The British management won their cases in NLRC and the Court of Appeals. In 2018, the bank won its case before the Supreme Court. In 2019, the NLRC recomputed the backwashes due the workers. Mediation is now ongoing between the bank and the union members.

In 1995, then Rep. Roilo Golez delivered a privilege speech at the House of Representatives about the case. That speech led to a public hearing, during which the congressmen were appalled at the lifestyles of the British management even as they crushed the union asking for better pay. For some reason, the hearings on the case were abruptly terminated.

To this day, nearly 28 years hence, the union members are still hoping to win a few crumbs back from the bank. That gang of expats who ran roughshod over the union is probably gone.

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT
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