Cushy jobs and quick bucks
December 1st, 2002
The government plan to take over the management of the Lopez-controlled Manila Electric Co. has inevitably aroused suspicions that it is meant primarily to provide the President’s associates (“cronies” is the less polite term) with cushy jobs, as administration Sen. Joker Arroyo has pointed out.
But it is also reminiscent of the martial-law period, when the Marcos dictatorship seized the power company ostensibly for the public good.
Although allies of Ferdinand Marcos in the 1960s (the late Fernando Lopez was twice Marcos’s Vice President: in 1965 and in 1969), the Lopezes eventually opposed Marcos’s attempts at asset-grabbing, putting them in the same ranks as the mass organizations that on the eve of martial law were already resisting Marcos’s authoritarian drift.
Marcos in fact justified martial law as a means to combat the “leftist-rightist conspiracy,” and to break the power of the oligarchy. The “rightist” and “oligarchy” part of that justification referred primarily to the Lopezes.
The seizure of Meralco was only part of Marcos’s looting of the business community, but it suited his drive for political vengeance as well. The Lopez family—it knew Marcos well—expected Marcos to act exactly as he did once armed with dictatorial powers.
But if it expected the government takeover of Meralco in 1972, it didn’t expect the Camacho plan in 2002. Because they’re allies of the current government, the Lopez group has expressed shock at the Arroyo administration’s proposal.
Although the Arroyo administration has claimed that unlike during the martial-law period, under its proposal there will be no change in ownership—it will “remain in the private sector”—management control is control just the same.
Control means making decisions and implementing them—and government control may not necessarily redound to the public’s benefit.
If carried out, the plan to take over Meralco could indeed turn the company into another cash cow—not primarily for the government but for those who will be in control of it and perhaps, not incidentally, for the 2004 campaign, for which the drive for funding has long begun.
Sen. Aquilino Pimentel Jr. put it thus: “It is a prescription for the eventual looting of Meralco assets, which should be preserved so the people can recover the overbillings by Meralco as ordered by the [Supreme] Court.”
Pimentel was of course referring to the Supreme Court decision which disallowed Meralco from charging income tax payments to operating expenses, and ordered it to refund to consumers some P28 billion in overbillings.
And yet that problem is precisely what the plan proponent, Finance Secretary Isidro Camacho, claims it is supposed to remedy. The plan is to increase government representation on the Meralco board of directors from three to six. President Gloria Macapagal-Arroyo would name the chairman of the board, the president of Meralco or chief executive officer, the chief operating officer, the treasurer or chief financial officer and the corporate secretary.
The knee-jerk reaction to the proposal from some consumer groups is enthusiastic support—despite the absence of any justification for a management revamp in Meralco as a solution to its problem of implementing the Court order if it becomes final and executory.
The government plan presumes that bad management led Meralco to its present predicament, which Meralco spokesmen naturally deny. The plan also assumes that government appointees will necessarily be better managers, if bad management is indeed the problem.
But there is no guarantee, and there has never been any guarantee, that government management is necessarily better. On the contrary. Every government from Corazon Aquino’s to Gloria Macapagal-Arroyo’s has in fact argued the contrary, which is why the Aquino, Ramos, Estrada and Arroyo administrations have all been committed—to varying degrees of loudness—to privatization.
The government should not be in business, the mantra goes, because it tends to be inefficient. It’s true, but not necessarily because government people lack the management skills to run corporations. It’s because the usual culprits—politics and corruption—bleed those corporations.
Government corporations have been known to support the lifestyles to which bureaucrats would like to believe they’re accustomed, as well as to provide inputs into the humongous campaign kitties every election requires of candidates for national office.
But the Arroyo administration plan would reverse the often-stated, piously intoned privatization policy—while promising no concrete solution to Meralco’s current financial difficulties.
The only thing the plan is in effect promising is that it will install a group of government managers who will then attempt to deal with those problems, beginning with the refunds the Supreme Court has ordered Meralco to pay its consumers.
For those consumers, among whom there is no love lost for Meralco—nobody on the planet loves any utility company, whether it’s the local water supplier or electrical firm—the demand of the hour is to be somehow refunded.
Government policy should necessarily be focused on satisfying this demand while assuring the continuity and improvement of the services Meralco provides.
The Camacho proposal does neither, and if only for the context in which it is being made—the country’s horrible experience with government management, and the immense temptation the siphoning of Meralco assets for the 2004 election offers—must be opposed.
The fundamental policy question is if the survival of Meralco merits government support. It does—if only because, as the Arroyo administration has pointed out, as the country’s second biggest corporation and as a provider of an essential service, its demise will have vast repercussions on the bleak economic situation. That the government is right about that doesn’t mean, however, that it’s also right in setting its sights on a takeover.
There is certainly no lack of other options. Although legally complicated, the Freedom from Debt Coalition’s proposal to turn the refundable amounts into consumer equity is one of the more reasonable ones, for example.
If implemented, the proposal would enable Meralco to survive and meet its obligations to its consumers. The details of implementation will be thorny, and will require a Supreme Court decision. But the proposal at least puts the public first, rather than the interests of government bureaucrats and of those politicians looking for a way to make a quick buck for 2004.
(Today/abs-cbnNEWS.com, November 26, 2002)