Business, labor, cause-oriented groups balk at high power costs

23-Sep-11, 2:28 PM | Michelle Orosa, TV5 and InterAksyon.com

(UPDATED - 5:20 p.m.) MANILA, Philippines – Business and industry leaders on Friday called on the Aquino administration to craft a road map to arrest soaring power rates as a labor party-list warned it would file a petition for a wage increase unless the cost of electricity is brought down.

Officials of the Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation, Philippine Steelmakers Association, Foundation for Economic Freedom and the TUCP (Trade Union Congress of the Philippines) party-list said government should take immediate steps to bring down power rates, which they described as among the highest in the world.

They also said that, 10 years after its enactment, the Electric Power Industry Reform Act of 2001 is not working.

The groups urged government to suspend all petitions to increase electricity rates, including one for a P0.39 hike in the stranded cost that is pending before the Energy Regulatory Commission (ERC).

"We want government to think twice, thrice before approving any increase in electricity. We are not against power costs, but we want, as businessmen, that rates be kept as they are now, without increases," PCCI president Francis Chua said.

Philexport blamed the high power rates for the low export growth this year.

"The cost of doing business has escalated, driven up by power rates," Philexport executive vice president Aninao Bagaboldo said.

TUCP Representative Raymond Mendoza noted "a convergence of interests” as “businesses (and) laborers are really hurting.”

“Dapat i-push ang another round ng (wage) increases (We need to push another round of wage increases,” he said.

The groups also recommended the creation of a single power purchaser that will purchase power from the cheapest supplier and sell this to distribution utilities like Meralco.

They also called for a review of the EPIRA and the design of the wholesale electricity spot market.

Meanwhile, the non-government Freedom from Debt Coaltion said on Friday that it had finally got the attention of ERC after 10 years of advocating against the privatization of the power industry.

However, the FDC said in a statement that the regulatory body had allowed only six officers of the advocacy group to participate in a dialog held at the former’s office in Ortigas Center, prompting around 80 leaders of various community-based organizations to stage a picket-protest outside the venue.

Milo Tanchuling, FDC secretary-general, said that they sought feedback from ERC Commissioners on the seven-page proposed measures, titled “Declaration of Unities and Action Points,” to address problems besetting the electric power industry which the Coalition submitted to the regulatory body weeks ago.

The declaration was an output of the FDC-sponsored “National Power Summit” held last June 25-26 in Quezon City.

It contains a long list of proposals on the following: renewable energy; debts of the National Power Corporation; how to reduce power rates; making power industry more efficient, reliable and secure; regulation; and, women under power privatization and the regime of Electric Power Industry Reform Act of 2001 (EPIRA).

Tanchuling said that FDC focused on four major points that would lower electricity rates and empower the consumers during the dialog.

“We urged the ERC Commissioners to stop the indexation of or pegging the prices of natural gas and geothermal steam to the international prices of oil and coal, respectively," said Tanchuling.

"This indexation makes the prices of electricity generated using natural gas and geothermal steam become higher, not to mention becoming vulnerable to price fluctuations in the world market for oil and coal” he added.

FDC also urged ERC to stop the incorrect implementation of ERC’s performance-based rate (PBR) methodology. The ERC’s PBR method allows power firms to increase rates in anticipation of future expansion and other capital expenditures.

“We believe that the ERC’s version of PBR methodology is unfair and unjust to consumers. Instead of increasing the efficiency and lowering the tariffs that commonly followed the implementation of PBR in other countries; those of local distribution and transmission utilities have been increasing at an average of 63 percent and 40 percent, respectively, in the Meralco franchise area,” said Tanchuling.

According to FDC, the fatal flaws of the ERC PBR include: failure to determine and benchmark the utilities’ cost to the cost of an efficient utility; absence of real efficiency targets; and, absence of real performance standards. 

“If ERC cannot implement PBR correctly, then it would be better to revert to the much simpler Return on Rate base methodology,” Tanchuling said.

http://interaksyon.com/article/13692/business-labor-cause-oriented-groups-balk-at-high-power-costs

Business, labor groups want roadmap to bring down power costs

by Alvin Elchico, ABS-CBN News
Posted at 09/23/2011 6:24 PM | Updated as of 09/23/2011 6:24 PM


MANILA, Philippines - Business, labor and academe groups have called on the Aquino government to come up with a roadmap to address the high cost of electricity in the country.

Officials of the Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation, Trade Union Congress of the Philippines (TUCP), Foundation for Economic Freedom, the UP National Engineering Center and the Philippine Steelmakers Association said that power rates in the Philippines are now among the highest in the world.

They noted that the government has no specific or strong action program to address the problem.

They also warned that the continued increase in power rates might result in energy poverty, wherein poor households can no longer afford basic energy services to put food on the table.

The TUCP, for its part, claimed high electricity costs could even trigger another round of wage hike.

The groups are asking the government to stop or defer any rate hike petition pending before the Energy Regulatory Commission (ERC), including the one by the Power Sector Assets and Liabilities Management Corp., which seeks to recover the stranded debts and costs of National Power Corp.

They are also calling for the creation of a single power purchaser that will buy power from the cheapest supplier and auction this to distribution utilities like Manila Electric Co.

The groups want a review of the performance-based rate (PBR) setting scheme, a method that guarantees firms return on future investments.

They also want the government to defer development of high cost renewable energy like solar, wind and ocean, and focus on cheaper ones like biomass and run-of-the-river hydro.

Lastly, the groups asked leaders of the departments of energy and finance, the ERC and the Joint Congressional Power Commission to work together and address high power rates with a sense of urgency.

http://www.abs-cbnnews.com/business/09/23/11/business-labor-groups-want-roadmap-bring-down-power-costs

Only half of Philippine land parcels titled

BUSINESS

DEMAND AND SUPPLY By Boo Chanco (The Philippine Star)
Updated September 21, 2011 12:00 AM

Apparently, our land registration system is more horrible than I imagined. I am told that only about half of the estimated 22 million land parcels in this country are titled. Much of the rest are only covered by land patents or at worse, only by property tax declarations which are not acceptable as bank collaterals for loans.

This situation is why, some economists have pointed out, our countryside is unable to benefit from the formal banking system. In a sense, there is so much wealth trapped because the land they inherited or own cannot be leveraged to produce more wealth or as capital in a business.

Not surprisingly, there is already a law that is supposed to address that problem, the Residential Free Patent Law (RA 10023) passed some years ago. The previous judicial free patent route was costly, protracted, and complex. This new law gives a faster administrative option to free patent.

According to Calixto Chikiamco, president of the Foundation for Economic Freedom (FEF), this law is about formalizing the land ownership of many residential lot owners and homeowners who only have tax declarations as proof of ownership. The purpose of the law is to “unlock dead capital” by giving formal titles to the occupants.

This law was supported by the Chamber of Thrift Banks and the Rural Bankers Association. They have been complaining about a lack of supply of titles as collateral for lending and this of course, limits their ability to grant loans and make the rural banking industry more viable.

But as with all the good intentions behind laws passed by Congress, the problem was the implementation. DENR, the agency with authority over land patents, does not have the manpower and the resources to really implement the law. Local governments on the other hand, do not have the trained manpower or the organization to do it too. Before RA 10023, the number of judicial free patents issued every year was 1,000. So it would have taken more than 6,000 years to finish the backlog.

This is how the FEF ended up doing more than expressing its collective opinion on an economic issue. If talk is cheap, getting their hands dirty in the field takes resources. With the help of the US Agency for International Development and the Asia Foundation the FEF launched a program to help in the implementation, primarily by developing the concept of LGU-led land titling.

The joint program is called “Property Rights for Economic Progress,” and technical assistance and training are now being provided to interested LGUs leading to the establishment of land offices for the implementation of the Residential Free Patent Act. In other words, the program seeks to have DENR empower LGUs (with DENR’s supervision and cooperation, of course) to implement the RFP law and move faster to erase the huge backlog of about 6 to 7 million untitled residential lands.

Chikiamco explained FEF’s involvement saying that the law will hopefully spur entrepreneurial activity through the buying and selling of lands and would give more opportunities for title holders to credit facilities of banks and other financial institutions using their land titles as collateral for loans.

“Our vision is that each LGU will have Land or Cadastral Offices which shall have complete land information using technologies like GPS and geo-tagging not only for tax purposes, but also for governance, such as crime prevention, public health, disaster management, etc. In Cebu, for example, their Land Office tracks the outbreak of dengue using these land information maps,” Chikiamco explained.

FEF started the program last year by choosing pilot areas and then develop a toolkit that can be rolled out to other LGUs. In Metro Manila, it seems that Pasig and Las Piñas still have plenty of untitled properties with only tax declarations as proof of ownership. Tanay, Rizal is also a candidate pilot area because most of the lands there are untitled. But the program got a big push in Cebu with a very cooperative LGU.

Although most of Cebu is titled (one of the first in the country to have cadastral proceedings), there are pockets of untitled but occupied public property, such as lands in Barangay Tinago and San Roque, which could yield as many as 2,000 titles. There is some initial success in Cebu City where an office had been established with a very competent team, composed of land specialist lawyers and a geodetic engineer.

But all the work in titling land will be for naught unless the integrity of our Torrens Title system is upheld by our national officials. We cannot have a parallel LRA producing authentic looking copies of land titles out of some second hand bookstores of Claro M Recto Avenue.

Customs and media

Over at Twitter last Friday evening, newly designated Customs Chief Ruffy Biazon was agonizing about what to do with the multitude of media folks covering Customs. Somebody said there are amazingly, 400 media representatives covering Customs. There are at least four tabloids that publish weekly covering only Customs.

Isn’t it obvious that most of those people claiming to represent media are anything but? Those from legitimate media in the Twitter discussion advised the new Customs Chief to meet with the publishers of the leading dailies and the owners of the leading networks. He should ask them to make sure their reporters covering Customs don’t become part of the corruption problem by moonlighting as fixers.

Then, the new Customs Chief should go ahead and ignore everyone else pretending to be reporters or even publishers. Biazon should not be afraid of these people even if they threaten him with nasty write-ups. Those noisy tabloids have no circulation worth their threats anyway. Throw the book at them if they try to fix anything. So long as he has nothing to hide, he shouldn’t be afraid of anyone, even those claiming to represent media.

The only reason why past Customs officials tolerated this outsized number of reporters supposedly covering Customs is because they most likely have something to hide. If Biazon keeps his nose clean, is transparent and makes himself accessible on social media, he should not be afraid of this 400 strong “press” group.

It just makes one wonder why, if there are indeed that many reporters covering Customs, why 2,000 containers could disappear without anyone knowing. Did they get scooped by smugglers while sleeping on the job? Or worse?

Cleaning up Customs is everyone’s business… specially media’s. If anyone claiming to represent media becomes part of the problem, he or she should be exposed and made to suffer the consequences. I am sure legitimate publishers and network owners will not tolerate wrong doing by their people.

Chinese and Jews

Ever wonder who is the shrewder businessman? Dr. Ernie E gives us an answer.

A Chinese guy goes to a Jew to buy black bras, size 38. The Jew, known for his business skills, says black bras are rare and he is finding it difficult to source them. Therefore, he has to charge the Chinese guy $50 each.

The Chinese guy buys 25 pairs. He returns a few days later and orders 50. The Jew said it was getting even harder to get so he charges the Chinese $60 each.

The Chinese guy returns a month later and buys the Jew’s remaining stock of 50 and this time, paid $75 each.

The Jew was somewhat puzzled by the large demand for black bras size 38 so he asks the Chinese guy “please tell me… what do you do with all those big black bras?”

“Oh,” the Chinese guy said, “I cut them in half and sell them to Jews as skull caps for $200 each.”

Boo Chanco’s e-mail address is bchanco@gmail.com. He is also on Twitter @boochanco

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=729219