Now comes news that the state-run pension fund Government Service Insurance System (GSIS) is prepared to sell its shares in Manila Electric Co. (Meralco) to San Miguel Corp. [read story] in its hostile takeover bid on the politically juicy and financially lucrative utility. But even with the GSIS block of shares, San Miguel still wouldn’t gain control of Meralco. But were the government, with all the shares owned by the other state-run pension fund Social Security System, Philippine Health Insurance Corp. and other agencies to join forces with San Miguel, it might be enough to tip the shareholder balance and, along the way, cover whatever losses the GSIS has incurred in the tumbling of overseas markets where it invested.

Such a move, where the GSIS ostensibly sells out it shares while at the same time acting as the puppet master of the government’s overall portfolio of shares and orchestrating everything according to some grand plan, would be vintage Winston Garcia. It’s how the GSIS president extracted maximum value and political clout from the takeover of Equitable PCI Bank. Some market observers say San Miguel would have to pay out P90 per share until reaching 35 percent of Meralco and then have to make a much better offer for enough shares to achieve a controlling interest. By then the price might have increased so much as to become financially unviable for San Miguel. At that point, the GSIS could then buy back its shares and unload the bloated problem from San Miguel’s hands—securing, at long last, control of Meralco, after all the while letting it play out in the media as a battle royale between the Lopez group that controls Meralco and San Miguel chairman Eduardo Cojuangco.

It is in the context of this complicated stock market power play—just the sort of thing to reanimate our increasingly comatose stock exchange—that the decision of the Energy Regulatory Commission (ERC) to reverse itself on Meralco’s application for a power rate increase [read story] should be viewed. Yet again, the ordinary consumer and industry are the victims here.

In the first place, we need to ask why the ERC didn’t reject the application out of hand since the objections raised by consumer groups were there from the very beginning. Arriving at that conclusion would have been simple enough: Meralco has not sufficiently made the case for increasing the price of the power it distributes, when it continues to owe the public billions of pesos in illegally collected fees and the costs of fuel in the global market are dropping. Raising power prices now serves the purpose of boosting Meralco’s coffers so it can pay the public back for collections the courts has declared as not for it to collect in the first place.

Meralco says it is asking the government to enforce only the new computation of what it is allowed to collect, in lieu of the old way of computing things that has been in effect for the past 80 years. Perhaps the government doesn’t want to get dragged into having to explain to the public why we have a performance-based regulation scheme instead of the old return-on-rate base scheme. Not least because the ERC, saying yes and then saying no, either shows itself to be incapable of understanding the new rules it is supposed to enforce, or because those rules would make sense only if Meralco were under new ownership.

The Lopez-run power distribution firm and its sister companies that generate power have never been shy about utilizing every means to raise rates. Domestic and foreign businesses and the Filipino consumer have long bewailed power prices, particularly in Metro Manila, as being too high. The government has been interested less in actually fixing the inefficiencies of the system and more in reaping political rewards from alternately coddling and then attacking Meralco.

Is it amateur hour at the ERC? Once again, instead of stability, things are in a state of flux. Instead of rationality, the whole question of what appropriate power rates to charge has been sidetracked by shadowy power plays by big business and the buccaneering enthusiasm of the GSIS. And yet again, the consumer is the pawn, instead of the beneficiary of sober policymaking by the state.

With editing by INQUIRER.net