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ROUGH CUTS | Corporate issue and wealth creation

INDEED, whichever way or action the government takes to address a particular issue, there will always be doubting Thomases that it has to confront with.

     There are two of these issues that surfaced lately. One is the apparent suspicion on the fairness of the Energy Regulatory Commission’s (ERC’s) rejection of the San Miguel Corporation’s (SMC’s) power generating companies’ petition for a rate hike in its power supply agreement (PSA) with the Manila Electric Co. (MERALCO), the largest and widest electricity distribution company in Luzon as well as in the entire Philippines. The other is the proposed bill in Congress creating the so-called Maharlika Wealth Fund, supposedly at the behest of no less than President Ferdinand Romualdez Marcos, Jr. and sponsored in the Lower House by his son  Ilocos Norte Congressman Zandro Marcos.

     In the first case we are of the opinion that it is going to be a battle royal between two giant power generating conglomerates which would likely be fought by the top officials running the two giant power corporations as proxies.

     Somehow, our suspicion is fixated on the immediate assumption by the top officials of the SMC power generation group that the decision of the ERC to deny the petition of the SMC power firms to increase its selling rate of electricity to MERALCO is tainted with elements of competition. And the assumption was based on the previous connection of the current ERC chairperson.

     The top executives of SMC and its power generating group are quick to attribute the ERC board’s rejection of their petition to the possible “influence” of the ERC chair who before her appointment by President Ferdinand Romualdez Marcos Jr. to head the power regulatory body, was Compliance Officer and chief legal counsel of Aboitiz Power Corp., a competitor of SMC’s power firms in supplying power in Luzon island.

     As of now, the top honcho of the Aboitiz conglomerate, Sabin Aboitiz, is one of President BBM’s top economic advisers. In fact the Aboitiz executive joined Marcos Jr. in his trip to the United States some weeks back, and was quite conspicuous in the President’s meetings with US-based businessmen and in the President’s visit to the New York Stock Exchange.

     So we can see that the SMC suspicion could be well-grounded though not necessarily accurate.  But again, in the course of events we cannot blame San Miguel Power generating firms’ executives to harbor such feeling.  They know that in the conduct of governance, whether these are activities of those running the regulatory agencies or the business organizations, still the aspiration is always the interest of both the person and the businesses that counts.

    There is no doubt that a resolution by the power regulatory body which will hurt or benefit any of the two is the most likely to be subjected to extreme scrutiny. We can only hope that the ERC rejection of the SMC power units’ petition is motivated by a desire to favor any corporate interest at the expense of another; that it is dictated only by the ultimate goal of satisfying the interest of the power consuming public.

     The second case though should be a cause for a major public concern.  It is this innovative, laudable project now in the introductory phase in the House of Representatives – the bill proposing the creation of the Maharlika Wealth Fund.

    If we have to look into the Indonesian and Malaysian versions of the fund, clearly it is well-intentioned. Unfortunately, in the case of the Malaysian experience of the fund as claimed by Sen. Imee Marcos, it was a total disaster. No, it was not the setting up of the fund and using the same for the people. The disaster was on how those tasked to run and manage the fund made a mockery of its utilization. The processes and guidelines of its use were clear. But those in charge in the fund use were more innovative in skirting the guidelines so they could dip their hands in the depository accounts.

     So the supposed wealth build-up did not materialize. Cash flew here and their; landed in private Malaysian hands or in the bank accounts of those who were tasked to accumulate and fairly share the wealth to the people.

     The Indonesian model though was a success until now which experience entices the President to propose the same methodology of building national wealth.

     The Philippine government’s proposal though is immediately creating a spine tingling fear of a possible failure of such venture.  Many well-meaning citizens and economic officials of government including the President’s sister, Senator Marcos and Central Bank Governor Felipe Medalla, are apprehensive of its possible outcome.  

     Who will not be afraid of the likely disaster in the wealth generation when the proposed scheme of initially funding the wealth build-up is by scrimping the money of the members of the Social Security System (SSS) intended for their retirement pension; the OFW’s contribution to the Overseas Workers Welfare Administration (OWWA); the GSIS members funds, and the Pag-IBIG employees and employers contribution.

     And even with all the safeguards proposed in the bill creating the wealth fund, there is no assurance that these safety measures can stand against the scheme of the corrupt and greedy individuals who will be on top of the Maharlika Wealth Fund.

     But as we said here earlier, we know that the proponents have only the best of intentions. But knowing the history of similar such ventures we cannot blame those who are planning to organize a protest rally against the bill come December 9, 2022.

     Of course if we have to be positive about the wealth fund creation we can only take a look how the Pag-IBIG Fund has become a big help to the people. In fact it was a creation initiated by no less than the President’s mother. But of course the sourcing of its initial funds was a different story to tell.





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