High power rates driving away investors
Two stories on the first page of the Inquirer Business section attracted my attention yesterday. One reported that local firms are relocating to China and Vietnam because the very high power rates here make them uncompetitive in the world market. The Philippines now has the highest power rates in Asia, higher than even Japan, the most developed Asian country.
The second story reported that Meralco, the biggest power distributor in the Philippines, is targeting a core net income of P14.5 billion this year, an increase of 19 percent from P12.2 billion in 2010.
Meralco has sister companies that also produce power from which it buys the electricity that it distributes to consumers. The Meralco president and CEO is no longer a Lopez but Manuel V. Pangilinan of PLDT-Smart and a lot of other companies with government franchises like those involved in water distribution, road tollways, media, hospitals, etc.
The reason the two stories attract attention is that while exporters are losing their shirts because of high power rates, power companies are raking in profits like they have gold mines.
Here we are trying to attract foreign investors yet investors that are already here are moving out because our high power rates make doing business here uncompetitive. Why will investors transfer here when the atrociously high power rates will make it hard for them to compete in the international market?
We even want to amend our Constitution to allow foreigners to own land, believing that that would encourage investors to come in. No, it won’t if electric rates remain high and traffic remains congested. I said it before and I’ll say it again: lower power rates, decongest traffic, improve infrastructure and investors will rush in because we have a competent workforce who speak English fluently, something that other Asian countries don’t have.
The cost of electricity makes up from 40 to 50 percent of the price of a manufactured product. World trade is now very competitive because of the removal of many protective tariffs. How can companies located here compete in the world market if their production cost is high due to high power rates?
Add the time lost as people and materials wade in congested traffic, not to say corruption and red tape, and you will really think of moving to another country.
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Remember Aliw Awards, the recognition given to outstanding Filipino entertainers? It is now roiling the entertainment industry because of a fight for control of the awards-giving body.
Aliw Awards was started in 1976 by Alice H. Reyes, then a director of the National Press Club. Alice nursed it through the years.
Most of today’s outstanding entertainers were recipients of Aliw Awards. Alice is the founding president of the organization.
Alas, Alice is now an outsider looking in at the Aliw Awards Foundation, the organization that gives the awards every year. What happened?
In 1987 when Alice went to the United States where her family is, she passed the hat to Leo Baluyut who held one Awards Night, then Aliw went into hibernation.
In 1998, the foundation was revived and has been presenting awards annually since.
In 2009, Jeatte Palabrica was installed as foundation president.
One week before Alice’s return from the United States last April, Palabrica allegedly called for an election and decided that past presidents and the founding president (Reyes) would just be advisers although the organization’s bylaws provide that they are ex-officio members of the board.
“For the past six months, she (Palabrica) has deliberately excluded me from all meetings, social events and preparations for the forthcoming Awards Night,” said Alice in a letter. “She has refused to talk to me even after board members had told her that ousting the founding president is not the right and decent thing to do.”
Alice has written a letter to Palabrica, portions of which I quote:
“Because you have refused to talk to me and to include me in the activities of the Foundation which I founded, arbitrarily relegating me to a mere Adviser of the organization which I nurtured since its creation 35 years ago, I have decided to write to you to clarify certain matters regarding the 24th Aliw Awards Night.
“I trust that you will understand my concern, for Aliw Awards Foundation is my baby, so to speak, and nothing and no one can take that away from me.
“To go back to the reason for this letter, I would like to know the extent of your participation in or your financial contribution to the forthcoming event.
“1. If you are the event’s producer, for the protection of the Foundation, there should be a memorandum of agreement between the AAFI and you, whereby you, as producer, agree to pay the TV rights to the show, which amount will be returned to you, as partial payment of AAFI’s outstanding debt to you.
“2. If you are NOT the producer and are merely advancing funds for the show, there must be a resolution of the board authorizing you to advance a certain specified amount to the Foundation, at what rate of interest, and detailing how you are to be repaid.
“Article V, Section 2 of the AAFI bylaws states: ‘The affairs and business of the Foundation shall be conducted under the direction of the Board of Trustees, which shall primarily be the governing body of the Foundation, directly responsible to the members thereof.’”
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KAPIHAN NOTES: There will still be no Kapihan sa Manila at the Diamond Hotel on Monday, Nov. 7, it being a non-working holiday. Kapihan will resume on Nov. 14.
