Power Reform - An Act of Betrayal?
Bulatlat.com
- If
the controversial Power Reform Bill was passed and signed hastily by President
Gloria Macapagal-Arroyo last week, blame it on powerful foreign financial
interests.
Economist
Danilo Arao of Ibon Foundation accused over the weekend the International
Monetary Fund (IMF), and Asian Development Bank (ADB) and other foreign
creditors of tightening the squeeze that finally led to the passage of the bill.
The
bill, signed into law last Friday by Arroyo, seeks the restructuring of the
Philippines’ power industry and the privatization of its government arm, the
debt-ridden National Power Corporation (NPC).
With
the bill now a law – after nearly five years of legislative intramurals and
opposition by militant and consumer groups – the Arroyo administration can now
avail of almost $1.2 billion in financial loans. The amount represents loan
pledges by the ADB, IMF and other foreign creditors.
The
loans were tied to the power reform bill, Arao, who is also a University of the
Philippines professor, said.
Before
the bill’s passage, the ADB and other foreign creditors had withheld $950
million. Of the amount, $200 million is earmarked for the revenue-starved
government’s budgetary purposes while another $200 million is allocated for
NPC. The balance will be used for the NPC’s Leyte-Mindanao interconnection
project, Arao said.
In
1999, the Ibon economist said, the ADB and the Japan Export and Import Bank
stalled the release of the second and third tranches of the Power Restructuring
Program loans. At that time, the Estrada administration failed to comply with
the condition that the power reform bill be passed by June 1999. The two loans
amount to $600 million, he added.
Similarly
during the same year, the IMF, in a letter to Rep. Arnulfo Fuentebella,
conditioned the release of a $300 million rehabilitation loan on the bill’s
early passage. (As a new House speaker late last year, Fuentebella vowed to
prioritize the bill’s passage.)
In
a press statement last April, the IMF stressed that it is engaged in
post-program monitoring with the Philippines, and that this “involves periodic
reviews of economic developments and policies.”
The
IMF, Arao said, identified the power sector as a priority area for structural
reform. It also argued that the challenge is “to implement plans
which…require determination on the part of government as well as effective
consultation and cooperation with Congress.
Allowing
the next Congress to decide on the power reform measure may delay further its
approval especially because Arroyo could not ascertain whether it could muster
enough support. That would also send “very bad signals to the international
financial community regarding the economic policy agenda,” Arao said citing a
government statement.
To
prevent rough sailing later – and to comply with foreign financial pressures
– the special session of Congress was convened late May. Proceedings were
interrupted by militant groups who tried to storm Congress to dramatize their
opposition to the bill.
But
Senate and House leaders seemed to have outmaneuvered the oppositors by making
sure the bill was passed by cutting corners. “Railroaded,” the militant
groups said in denouncing the bill’s approval.
Late
last year, Congress figured in a scandal when some legislators accused their
colleagues of an attempt to rush the bill’s approval through a
multimillion-peso bribery.
The
power reform bill has been opposed not only because of the inevitable power rate
increases but also due to the imminent mass lay-off of NPC employees. Bulatlat.com