The funny man of Asia

By Rod Kapunan 

National Economic and Development Authority director general Arsenio Balisacan  admitted that the hooted seven to eight percent economic growth did not give a dent to the metastasizing poverty in this country.  Maybe the chief economic planner was candid enough to admit, but somehow failed to explain why we remain deeply entombed in poverty, and now looked upon as the “funny man of Asia.”  Balisacan could have earned the respect of our people had he explained why we continue to slide despite the huge P2.1 trillion budget pumped in to support this pretending-to-be-honest government.
As mostly apologists of the oligarchy, our economists continue to daydream that economic development characterized by economic growth could reduce poverty.  However, not one ever came to think that even with rapid economic development, the poverty is essentially a problem affecting the individual and his family.  On the other hand, development is impersonal for even if the country has achieved a phenomenal economic growth, the majority of our people could remain poor. 

We may be able to build the requirements of a progressive society, but our people will continue to stagnate in such a despicable state of poverty because we entrusted to the private sector the primordial task of economic development that adheres to the principle that “nothing is for free.”  Our people now pay for every public service that is rendered nicely paraphrased to guarantee investment returns.  Often, the amount they pay is beyond their reach; conversely stated, it is something only the few could afford.   

The expenses they incur to cope with the impersonal development no longer match with their income.  Where before basic things essential to their survival were integrated as co-axial to economic development and made necessary to justify their payment of taxes, that is now treated as archaic.  Invariably, we created an ultra-elitist society designed to exclusively satisfy their cravings for luxury, while exacting from the ordinary people the burden of sustaining their huge profit with the poor permanently locked in poverty. 

This explains why there has been a steep increase in the expenses of the wage earners for their basic needs in contrast to their income such that it has become a daily problem of trying to make both ends meet.  That disparity now stands as the single factor why many are wallowing from a more acute degree of poverty.  The concern for public service and welfare in exchange for their participation in our make-believe democracy has all but been erased. 

Rather, the oligarchy has taken full advantage of free enterprise to amass more wealth resulting in the serious tilting of the economic balance between those earning out of their labor from those generating huge profit out of their ownership of those behemoth industries.  Invariably, economic growth is stunted because the majority of our poor people have no access to the newly created wealth to sustain whatever growth rightly called progress.  Perhaps, the book written by Charles Derber, People Before Profit, would attest to what we mean.

No less than two authors of internationally best-selling books agree that those countries in Asia that  achieved phenomenal economic growth were those that maintained control and ownership of their vital and strategic industries, something that  Marcos tried to build to sustain the goals for economic development.   Michael Schuman who wrote “The Miracle: The Epic Story of Asia’s Quest for Wealth”, and Martin Jacques who wrote “When China Rules the World,” are one in assessing that countries that  maintained  ownership of the strategic  industries succeeded in achieving a high level of economic development.     

To make myself clear, when those despicable ones decided to trade our electricity dubbed as Wholesale Electricity Spot Market (WESM), it did not seep into their cranial lobe that both the producers and the distributors of electricity lost control by default the price for their commodity.   Although they argued that trading could reduce the cost of electricity, their real motive was for the full deregulation of the industry.   Since the power producers and the distribution utilities constitute a handful few because of the capital-intensive nature of their business, oligopoly, cartel and price-fixing was bound to happen.  

In fact, they flagrantly violated the prohibited practice of cross ownership in the industry such that power producers could now operate their own distribution utilities, and in every phase of the industry they enjoy a monopoly. To legalize their price manipulation, they created a private corporation called the Philippine Electricity Market Corp. (PEMC), which is not even provided for in the Epira Law.  Thus, while the trading of electricity was made legal through WESM, it was PEMC that formalized the cartel, and shielded the owners from suit due to price rigging.

The fiasco that resulted in the steep increase in the price of electricity, no doubt, was the handiwork of insider trading collaborating with some of the members of PEMC, something that could not have happened had they not been allowed to trade their commodity.   Insider trading made a sham of their make-believe open competition supposedly designed to reduce the cost of electricity. The funny thing is that the cartel used as their spokesman a member representing the various industries when supposedly his duty is to oppose any increase much that industries, being heavy users of electricity, are the first to be affected by any price increase.   

It cannot be said that the government did not connive with these people to rig the price because the chairman of PEMC is no less than the Secretary of Energy.   But as usual, Secretary Jericho Petilla blamed the skeletal remains of the state-owned Napocor, now called Private Sector Assets and Liabilities Management Corp.  (PSALM),  for allegedly “failing to dispatch its energy load to WESM, thus resulting, he said, in the runaway hike in the cost for generation,”  forgetting  that he presides over the decision making of that semi-legal cartel syndicate that  effectively substituted and reduced  the Energy Regulatory Commission to a mere scarecrow to deceive the public into believing that electricity remains regulated.  

To insulate owners from the adverse reaction of the public, it is believed they are using PEMC to fund some NGOs from the educational fund deducted from the consumers to justify their price rigging in a manner of frying consumers in their own lard. 
rpkapunan@gmail.com