The Senate Committee on Energy headed by Sen. Win Gatchalian conducted on July 6 a hearing on the “electric shock” that Meralco and other power distribution utility firms delivered to their customers in the months of May and June. According to Chairman Agnes Devanadera, the Energy Regulatory Commission was swamped by almost 50,000 customer complaints on the inexplicable doubling, trebling, quadrupling and quintupling of their electricity bills.
The new Meralco rates have further flattened the Covid-stricken economy. They are destabilizing businesses, big and small, and the lives of many Filipinos, especially the poor and the “new poor” whose jobs and livelihoods have been decimated by the ECQ/GCQ. It is surprising why the Department of Energy and the Inter-Agency Task Force (IATF) on Covid-19 have not formally summoned Meralco and other utility firms to give a formal explanation not only on their shocking post-ECQ electricity rates but also on their equally shocking billing behavior: charge-high-explain-later. Now these utility firms are telling the customers: no need to worry about being disconnected because they can pay on an instalment basis!
The truth is that in national emergencies, the government cannot allow private companies providing essential public services to conduct business freely sans any rules and without any coordination with the government on how to deliver these services at reasonable rates. The Covid-19 pandemic is war. And in war situation, the primary duty of the government is to save people’s lives. It has to adopt mitigation measures, including direct intervention in business operations, in order to ease the suffering of the population.
This interventionist thinking is favored by some revisionist economists in the IMF, meaning those who are opposed to the IMF neo-liberal old timers who worship on the altar of laissez faire. The latter unequivocally support full freedom for corporations to conduct business as they see fit at all times. In an IMF blog (April 1), Giovanni Dell’Ariccia et al. wrote that one objective of economic policy in crisis periods is to “guarantee the functioning of essential sectors” such as the “health care, food production and distribution, essential infrastructure, and utilities.” Such guarantee “may even involve intrusive actions by the government to provide key supplies through recourse to wartime powers with prioritization of public contracts for inputs and final goods, conversion of industries, or selective nationalizations.”
As examples of intrusive government actions, Dell’Ariccia et al. cited France’s seizing of medical masks and in the US, the activation of the Defense Production Act to ensure the production of medical equipment. Further, they wrote: “Rationing, price controls, and rules against hoarding may also be warranted.”
Such proposals draw inspiration from Franklin Delano Roosevelt, the American president who slayed the Great Depression of the 1930s by openly asserting the right of the national government to intervene in critical areas of the economy. On managing privately-run public utilities, Roosevelt railed against the “monstrosity” posed by these companies and suggested government takeover if the people were not happy with the service rendered or rates charged by these companies. In actuality, Roosevelt did much more: nationalizing the Tennessee Electric Power Company, setting up rural electric cooperatives all over America, regulating the banking sector, intervening in the operations of coal mines and oil drilling operations, mediating union-management conflicts, and so on and so forth.
Of course, nationalization and government interventionism in the operations of big businesses are not cure-all panacea to complex problems ailing the economy. But the right of the government to intervene in the delivery of essential public services to protect the lives of the people is paramount. This right was declared but not fully exercised by the Philippine government during the December 1989 violent putsch by rebellious elements of the Armed Forces of the Philippines. The then eighth Congress hastily enacted Republic Act 6826, which authorized the president “to temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest.” The rationale given for the said RA 6826 is worth reiterating: “To protect the people from hoarding, profiteering, injurious speculations, manipulation of prices, product deceptions, and cartels, monopolies or other combinations in restraint of trade.”
Now what are the most essential public services that the people want to be delivered efficiently at reasonable rates in Covid-19 times? In our mind, the list should put the following as the most important: health care, food distribution, electricity, water and telecom/digital connectivity.
The IATF and the Cabinet, together with the LGUs, have been focusing their energy on the delivery of the first, that is, the health care services. The government’s Bayanihan 1 and 2 have allocated hundreds of billions for the facilities, materials and personnel needed to rebuild a broken public health care system in order to contain the spread of the virus. The declared intention is fine. The problem is how well the DOH and other agencies are faring in delivering health services to the people nationwide. This deserves a separate discussion.
As to food production and distribution, Agriculture Secretary William Dar has been preaching two major gospels—plant-plant-plant and better food distribution. However, a number of farmer organizations and CSOs are puzzled: why is the government still keen in supporting Philippine reliance on imported rice, imported poultry and other imported agricultural products? Is this not as good a time to use the Covid-19 crisis as an opportunity to speed up domestic agricultural modernization and achieve higher level of food security?
As to the delivery of power, water and digital services, problems abound as reflected in the flood of complaints raised against Meralco and other power utility companies. There are also widespread customer complaints in the surge of water rates being levied by the water companies, a number of which are trying to “privatize” the profitable local water utility companies. And like in the case of electricity, no acceptable explanations are given by these water firms.
And then there is the Internet and telecom service. This service has become truly essential given the social distancing requirement under Covid-19 pandemic and the deepening role of cyber connectivity in the social and economic life of every Filipino family. The problem is that the duo monopolists involved in the delivery of Internet/telecom services have been slow in responding to the numerous complaints on intermittent disruptions and disconnections.
For example, in the case of the PLDT, the millions of customers are given only one number to dial —171—in order to report or file a complaint. This number is always busy and rarely works. And, if the customer is lucky, he/she can get a concrete reply from a customer assistant within two weeks of endless dialing and endless waiting for a PLDT personnel to answer. The PLDT does not even provide an e-mail address which customers can use to send “love letters” on their connectivity problems.
This brings us then to another related issue: where is the corporate social responsibility (CSR) of these big private utility companies in Covid times? What have they done to ease the suffering of the people?
At the height of the lockdowns, these firms generated media publicity regarding their contributions to the relief and social amelioration programs of government and non-government agencies. However, they seem to have forgotten that the best CSR contributions that they can give to the nation is to become reliable partners of government and society in providing reliable and reasonably-priced services to the people during difficult times. CSR begins at home, that is, beginning with the respect that the company accords to their customers, employees and host communities.
In the case of Meralco, it could have demonstrated such respect by conducting prior, full and honest information sharing, consultation and dialogue with various segments of their paying customers regarding the company’s planned rate adjustments and the reasons why such adjustments are unavoidable. The subsequent explanations, which many still find incomprehensible, were released after the storm of public protests generated by the new power rates.
Also, Meralco should have informed the nation on what it is doing to lower the cost of power by buying power at lower rates. For example, Meralco has not responded to the criticisms raised by the environmental CSOs that the company has concluded Power Supply Agreements with generating companies which charge higher rates and use GHG-emitting coal material. This goes against the trend in the world where more and more countries such as UK and Malaysia are committing themselves to the increased use of renewable energy such as solar, which has become cheaper compared to the nonrenewables such as coal and gas.
Meralco can gift the nation by providing leadership to the Philippine business community on how to go renewable and customer-friendly.