Part Two
Down the drain
ON June 19, 1986, four months after the Edsa pocket revolt, President Corazon C. Aquino, likewise, deliberately abolished the Ministry of Energy and placed the multibillion-peso Philippine National Oil Corp. (PNOC), a successful Philippine firm featured successively in Fortune’s 500 Best Corporations, under the administrative supervision of the Office of the President.
As a consequence, the country’s long-term total energy plan went down the drain after the Aquino regime corrupted, dissipated and privatized its money-making corporations and subsidiaries, including the National Power Corp. (NPC) and the highly profitable Petron, which served as a buffer against foreign oil production and distribution monopoly. Petron then controlled 40 percent of the country’s fuel-distribution network.
To cover its beaten tracks, Mrs. Aquino, through the Presidential Commission on Good Government (PCGG), charged the late Energy Minister Geronimo Zamora Velasco with having allegedly committed corruption, only to be later declared innocent by the Supreme Court.
Velasco died in 2007, but left behind a solid reputation of honesty and certitude as well as his own personal files made into a book, which exposed the unforgivable sins of the Aquino regime in the energy sector.
Here’s an extract from Velasco’s 209-page book Trailblazing: The Quest for Energy Self-Reliance, published by Anvil (Manila) in 2006:
“…it appears that Mrs. Aquino abolished the ministry upon the advice of Cesar Buenaventura, who had claimed that the Ministry of Energy was ‘the most corrupt’ among the Marcos-era agencies. [Joker Arroyo, President Aquino’s executive secretary, who had witnessed how hard Buenaventura lobbied to have the ministry abolished,” confirmed Velasco’s statement in his book.
“…Cesar Buenaventura was one of Mrs. Aquino’s closest advisers, but he also happened to be the president of Pilipinas Shell at the time. I have no idea as to Buenaventura’s basis for claiming that the ministry was the most corrupt, but I also have no doubt that he had Shell’s interest in mind when he recommended the ministry’s abolition. I could sense that the foreign oil companies were never happy with PNOC, not only because Petron led the pricing structure in the oil market, but also because PNOC’s energy development program, with its emphasis on tapping non-oil sources, threatened to erode the oil companies’ position in the energy market.
“Riding on the wave of anti-Marcos sentiment was a good way to eliminate a rival. In my opinion, the abolition of the ministry showed Mrs. Aquino’s inexperience in proper governance. Buenaventura may have been a close friend of hers, but how could she, in conscience, consult someone like him, whose interest was to protect his employer, a foreign oil company operating in the Philippines? On the mere say-so of Buenaventura, Mrs. Aquino dismantled the whole energy complex that took 12 years to build and which, in government annals, was unique for the successes it achieved, considering the constraints faced by the country.
“Incidentally, the Queen of England knighted Buenaventura, thereafter. Did that have anything to do with the ministry’s fate?
“Joker revealed that other advisers had already been eyeing Petron’s privatization early on in Mrs. Aquino’s term; they were lobbying for British Petroleum and for a Kuwaiti oil company. Other groups close to Mrs. Aquino’s advisers were interested in PNOC’s privatization, because this would enable them to get their hands on Petron.
“From a policy perspective, there was no reason to privatize PNOC Petron even at the time. Why would a government in dire need of cash be willing to let go of a good source of income? PNOC was the biggest government corporation in terms of revenue.
“Much of it was due to Petron, which commanded about 40 percent of the local oil market and occupied the top spot in the industry. More important, as Joker himself acknowledged, PNOC’s involvement in oil importation, refining and marketing took away the foreign oil companies’ advantage of being the only ones who knew how to play the game. It is not surprising then that Petron threatened the interest of multinational oil companies.
“Joker’s point about PNOC’s impact on the oil companies is significant, if only because it affirms the fact that foreign oil companies have always invited suspicion that they act as a cartel and dictate the local price of oil regardless of international prices. This issue has hounded the local oil industry since the Ramos administration deregulated the sector, and has intensified in times of unabated oil price increases, such as what we are experiencing now.
“To my mind, however, there is one important question that we should confront—a question that has so far evaded a real answer: As a matter of policy, what should we
expect from the foreign oil companies in the Philippines? It was not until we operated Petron that I started to realize how critical an oil company is to a country.”
Even the NPC, whose income between 1977 and 1985 rose from P0.4 billion to P18 billion in sales revenue and had total assets of P107.2 billion, almost 10 times of what it had in 1977, was not spared by Cory’s incompetence and rapacity. Her regime and some of the succeeding administrations broke it up, dissipated its assets and privatized the majority of its operations, including generations, transmissions and distribution under the guise of breaking up government monopoly in the distribution of power.
To be continued
To reach the writer, e-mail cecilio.arillo@gmail.com.