Cory Aquino regime is the reason for expensive energy costs in the country - The Daily Sentry

Tuesday, June 12, 2018

Cory Aquino regime is the reason for expensive energy costs in the country

In a Potpourri blog post in a website called Kahimyang, it was discussed how the regime of Corazon “Cory” Aquino right after the fall of the late President Ferdinand Marcos, was the root cause of increasingly expensive energy costs the Philippines is suffering through.
Photo credit to the owner

It is said that Ferdinand Marcos had an effective plan for the energy department of the Philippines. This included regulated policies and laws leading to a steady, low-cost supply of oil, and resulting to cheap electricity to the public.

In 1973, the Philippines had a 92% dependence on oil from the Middle East. It is said that after Marcos’ efforts to ease the costs of energy consumption, reduced the country’s dependence to 71% in 1980, and 57% in 1984.
Photo credit to the owner

By the year 1985, the Philippines was using a lot of geothermal power, standing second largest in the world next to California.
Photo credit to the owner

After Marcos was ousted from power by the 1986 EDSA People Power Revolution, late President Aquino abolished the Ministry of Energy. Then, the National Power Corporation (NPC, and the Philippine National Oil Corporation (PNOC) was placed under the supervision of the Office of the President.

Records say that the NPC ballooned in sales revenue from P0.4 billion to P18 billion between 1977 and 1985. They also had P107.2 billion worth of assets in the same year.
Photo credit to the owner

It was also then that the PNOC was featured in Fortune’s 500 Best Corporations. Petron, however, was used as a buffer against foreign oil production and distribution monopoly.
Photo credit to the owner

President Aquino abolished the energy department stating that then Energy Minister Geronimo Zamora Velasco was involved with corruption in the company. He was later on cleared of the charges by the Supreme Court.

Velasco died sometime ago but left behind a solid reputation of honesty and certitude as well as his own personal files made into a book that exposed the unforgivable sins of the Aquino regime in the energy sector.

Here's an extract of Mr. Velasco's 209-page book Trailblazing: The quest for energy self-reliance, published 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.
(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.)

"… 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.
Former Senator Joker Arroyo / Photo credit to the owner

"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.
Photo credit to the owner

"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.
Photo credit to the owner

"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?

The PNOC and Petron were then privatized under the Aquino administration, allowing the companies to dictate their prices with minimal regulation.

Source: Kahimyang