How Cory Aquino abolished the Philippines’ entire energy program - The Daily Sentry

Thursday, March 29, 2018

How Cory Aquino abolished the Philippines’ entire energy program

Photo credit: The Kahimyang Project
The entire energy program that former President Ferdinand Marcos created which succeeded at bringing a steady, low cost supply of oil and cheap electricity to consumers was wiped out in swiftness through false accusations of the administration of former President Corazon Aquino.

During the Marcos regime, the country’s dependence on outside sources of crude oil was from 92 percent during the start of the energy program till 57 percent by 1984. In 1985, the Philippines experienced a 44 percent reduction on imported energy resources which amounted to billions in savings and the Philippines also stood as the second largest user of geothermal power in the world, only a position away from California.

Yet four months after the EDSA revolution, the Aquino’s administration took control of the National Power Corporation (NPC), Petron and the Philippine National Oil Corporation (PNOC), after it successfully eradicated the Ministry of Energy.

But to eradicate such as successful branch of the Marcos was impossible to do without dirt against it to prove that it should be eradicated. And this is what the Presidential Commission on Good Government (PCGG) did, charging the late Energy Minister Geronimo Zamora Velasco with claims of corruption which was later proven innocent by the Supreme Court.

This gave the administration enough time and accumulated power to bring down the ministry. Sadly Velasco died a few years ago but he was able to expose the Aquino Regime’s true colors through his book, Trailblazing: The quest for energy self-reliance.

In the book, Velasco states that he was aware that the Ministry of Energy was being claimed to be ‘the most corrupt’ by Cesar Buenaventura, the president of Pilipinas Shell at the time and Aquino’s closest advisers. The basis behind the claim remains unknown to Velasco but the motive was clear, to destroy the Shell’s biggest competition, Petron and PNOC.

As Velasco narrates, even Joker Arroyo was aware of such intentions, that the prices that Petron sets, which doesn’t follow the international markets, and PNOC’s ability to import, refine and market oil was a huge threat to foreign oil companies who want to take advantage of the Philippines’ supposedly lack thereof knowledge with oil and its market.

All the success and sales revenue that the aforementioned corporations accumulated through the efforts of the ministry were eventually dissipated into multiple assets and the operations that the government once took control of was passed on to private sectors that would bring a wave of helplessness to consumers who’s been under the mercy of foreign oil companies that dictate prices at their own will. This affects the nation at an economic level, which has brought the country as one of the slowest progressing countries in 2012.

All thanks to former president Corazon Aquino, her inexperience in good and proper governance and her gullibility which caused the down fall of the country’s economy.

The excerpt from Energy Minister Geronimo Zamora Velasco’s book that was published in 2006, entitled Trailblazing: The quest for energy self-reliance.

"… 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.

"… 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 twelve years to build and which, in government annals, was unique for the successes it achieved considering the constraints that faced by the country.

"Incidentally, the Queen of England knighted Buenaventura thereafter. Did that have anything to do with the ministry's fate?

"Joker (Arroyo) 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?
Energy Minister Velasco (seated right) signs the bilateral agreement that would commence the Philippine-New Zealand partnership leading to the country's enviable position as one of the world's top geothermal leader. Marcos, Tatad, Enrile in the background, photo from The Kahimyang Project