MANILA — As a result of its continued privatization of vital utilities and the deregulation of the oil industry, the prices of power, water. and oil have increased most rapidly during the last six years of the Arroyo administration, according to independent think-tank IBON Foundation.
The Electric Power Industry Reform Act (EPIRA) was one of the first major pieces of legislation signed into law by President Gloria Arroyo when she assumed power in 2001. Over the next six years of her government, the largest annual rate hikes were recorded: residential rates by 20% in 2006, commercial rates by 22% and industrial rates by 22%, both in 2001.
The power industry privatization is also a significant factor in aggravating public indebtedness. Onerous contracts entered into by the National Power Corporation (Napocor) in the 1990s with private-sector independent power producers resulted in the state-run power firm running up more than P500 billion ($10 billion) of outstanding debt and P1.5 trillion ($30 billion) in stranded liabilities.
The largest rate increases of the privatized water service concessionaires serving Metro Manila, Maynilad and Manila Water, were also under Arroyos watch. From 1997, when the Metropolitan Waterworks and Sewerage System was privatized up to 2000, Maynilad water rates increased by 24% and Manila Waters by 19 percent. From 2001-2006, however, Maynilad rates increased 249% while Manila Water grew by 313%. Another round of hikes was programmed at the start of 2007.
Although the privatization of water services in Metro Manila did not occur during Arroyos watch, the Arroyo government re-privatized Maynilad in 2006 after bailing out the concession, which had a net loss of P2.5 billion due to mismanagement at the time its private-sector owners gave it up.
The Arroyo government has also resisted widespread calls to re-regulate the downstream oil industry in the wake of seemingly endless rounds of oil price hikes since its deregulation in 1997. Pump prices of gasoline increased by 283% and diesel by 347% from 1997-2006 with the largest increases of 138% recorded in the last six years since 2001.
The Arroyo governments continued imposition of these burdensome policies only underlines its adherence to the dictates of powerful foreign transnational corporations and their mega-profits over the welfare of Filipinos. In fact, the three biggest oil corporations in the country declared a combined net income of P48 billion ($960 million) from 2001-2005. Maynilad, which is a consortium that includes the United Kingdoms United Utilities, Japans Mitsubishi Corporation, and the American Bechtel, similarly recorded a net income of P5.2 billion ($105 million). davaotoday.com
