FIRST PERSON - Alex Magno (The Philippine Star) - August 29, 2020 - 12:00am

PhilHealth, it turns out, is a sick organization not only figuratively but also literally.

The beleaguered president of the agency, Ricardo Morales, resigned for health reasons. He is undergoing treatment for cancer. Several senior officers, in the course of the pressure-laden congressional hearings underway, have admitted suffering from a variety of medical issues.

?The senior vice president asked to lead the agency in the interim is also sick. Much concern has been raised about his physical ability to steer PhilHealth through its worst crisis.

?The ombudsman has ordered the preventive suspension of a score of senior PhilHealth officers.  The NBI is conducting its own investigation into the reported scams in the agency. The legislative inquiries are bound to continue.

?In the meantime, a talent search has begun for a person to take PhilHealth’s leadership at this most critical time.

Since this agency is principally in the business of providing medical insurance, someone with strong credentials in actuarial science ought to lead it. Since this an agency torn apart by factional warfare, its next leader must restore managerial sanity to this organization.  Since the agency appears to be infected with scams at every level, the next leader must be a graft buster par excellence.

Since the agency is said to be on the brink of bankruptcy, its next leader must be a financial wizard who will cut leakages and improve returns on the fund. Since the agency is, imaginably, severely demoralized, it needs a leader who will inspire the employees to put in the effort required to rebuild PhilHealth.

In a word, the next PhilHealth leader must wear many hats and have a deep well of energy and passion, wield a lot of credibility and be convincing in his integrity. One wonders if such a person exists and if he can be convinced to serve.


?The Energy Regulatory Commission (ERC) is being imperious when it decided to impose a “token penalty” on Meralco, the country’s largest power distribution utility. The penalty, amounting to a P19-million fine, was for causing confusion and distress among consumers when the company issued billings based on estimated consumption.

?It was the ERC that issued an advisory during the period of enhanced community quarantine allowing distribution utilities to bill their customers based on estimates from previous consumption. This was because the quarantine restrictions prevented meter readers from doing their job.

?Only a small portion of the electricity bills consumers get goes to Meralco as distribution charges. The bulk of the amount that appears on the billing goes to generation and transmission costs. Therefore, some form of provisional billing was needed to activate the revenue flows that will allow the generation companies to be paid. Otherwise, power shortages could happen.

?Companies that generate power have their own bills to pay. They need to pay for the fuel they use to produce electricity. They also need to service their debts. If the distribution utility does not collect from the end users to pay the generation utilities, our whole energy sector breaks down.

?The advisory issued by the ERC, as was established in the subsequent congressional hearings, lacked clarity. It provided no guidance on how exactly the estimates are to be computed.

?Nevertheless, Meralco tried the best way it could to comply. The distribution utilities advised its customers that the delayed billings were based on estimates. Later, the company sent its customers a fact sheet detailing the process and explaining that corrections will be made after actual meter readings could be done.

?When the ERC advised the distribution utility to allow four months of staggered payments to help consumers cope, Meralco did better by extending installment payments for a longer period (including billings for the period March 1 to 15) and declaring a moratorium on disconnections for consumers struggling to pay.

When congressional leaders asked Meralco to remove surcharges for remote bill payments, the company obliged. When politicians asked for discounts to be given lifeline consumers, the company said it would draw up a plan to do so even if this meant losing revenue.

?There are real limits to the extent small consumers could be subsidized by the distribution utilities. All consumers will be worse off if the company is forced to bankruptcy by regulators and politicians out to score popularity points.

As a matter of record, Meralco advanced payment to the generation companies, the transmission company, the Wholesale Electricity Spot Market and government even as the ERC’s confusing issuances prevented the distribution utility from fully and promptly collecting from its customers.

?Despite all these, the ERC whimsically imposed a “token penalty” on Meralco for the “bill shock” that happened. The same “bill shock” happened to consumers of all other distribution utilities. But the ERC, defying the principle of universal applicability, penalized only Meralco but not the others. No explanation was offered for this.

?Consumers in several countries, such as Indonesia, suffered the same “bill shock” because of billings accumulated during the lockdown months. But only in the Philippines, and only in the case of Meralco, is a “token penalty” imposed.

?Out to score popularity points for itself, consumer advocacy group Laban Konsyumer proposed the “token penalty” be distributed pro rata to the consumers who complained about excess billings. This proposal was made even as the same group testified in the congressional hearings that the “bill shock” happened because of the ERC’s ambiguous advisories.

?It seems the ERC is covering up its own shortcomings by using its regulatory power to pass blame to the distribution utility.

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