analysis

Nationalize Power Industry!

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By Ray L. Junia, Publisher

Something scandalous about the nation’s power industry – it’s in the hands of few oligarchs!

From the Sys to Lopezes, Aboitizes and Consunjis, they are in control of a multi-billion peso industry, virtually placing millions of hapless Filipinos at their mercy.

In recent years, new players emerged with just one driving obsession – rake in billions of pesos in profits like literally squeezing blood from stone.

They include the old-rich Ayalas, banking magnate George Ty and, of course, listed retailer Meralco controlled by Indonesian conglomerate Salim Group through controversial “point man” Manuel V. Pangilinan (aka MVP).
From generation to transmission and distribution of electricity, the oligarchs are just everywhere, placing them in a vantage position to dominate – and dictate – the nation’s economy.

Like A Sore Thumb
Among industry players, Meralco prominently sticks out like a sore thumb, it being the most vilified for raising its power rates to exorbitant levels sans public consultations, in cahoots with an inept Energy Regulatory Commission.

While it cost the Salim Group billions of pesos to buy the Lopezes’ controlling stake in Meralco, their return on equity (ROE) had been awesome, if not mind-boggling.

Based on the firm’s annual reports, Meralco’s (ROE) and profit margin have risen several folds since 2008.
From just five percent in 2008, Meralco’s ROE steadily increased to 10 percent in 2009, 16 percent in 2010 and 25 percent in 2012.

This means that the ROE of Meralco has ballooned five-fold in a span of just five years.
In comparison, Meralco’s 2012 ROE of 25 percent is much higher than the entire power industry’s estimated average of around 15 percent.

From Filipino Pockets

Yet, Meralco has been stingy as far as complying with the government-mandated refund to its customers is concerned.

Apparently, Meralco’s foreign owners want to reinvest elsewhere such as in Singapore and Myanmar the profits they earned from the pockets of ordinary Filipinos.

In Singapore, Meralco acquired last February two brand-new natural-gas-fired 400-megawatt generators valued at US$1.2 billion with earnings from its Philippine operations.

Analysts say that had they been built in the Philippines, Luzon’s 8,000-MW capacity would increase by 10 percent and would have decreased incidence of brownouts and brought down Meralco’s high electricity rates.

Meralco’s defiance is an offshoot of the government’s glaring pro-business, anti-poor policy stance.
Blame, of course, rests squarely on the government’s lack of political will to resist the policy dictates of multi-lateral financial institutions which have a stranglehold on the government’s finances.

Foreign Meddling
For instance, the Electric Power Industry Reform Act (Epira) was passed by Congress in 2001 under threat by the World Bank, the International Monetary Fund and the Asian Development Bank to freeze the bailout funds for the once debt-saddled state-run National Power Corp. (Napocor).

Epira was nursed in its infancy and continue to be protected by its principal author, Sen. Sergio Osmena, who has chaired the Senate committee of energy for the longest time now.

Meant to foster competition in the power industry, Epira turned out to be a toothless law, unable to check its rampant violations by profit-hungry power firms and protect consumer interests.
For more than a decade, Epira failed to check the unabated surge in power rates, one of Asia’s highest, the reason why foreign investors shied away from the Philippines.

Ironically, Epira bred the rise of twin evils of monopoly and oligopoly in the power industry, precisely the key objectives it wanted to eradicate to bring sanity to an industry which has gone berserk with endless rate increases.
Not content with just distribution, some players like the Lopezes and Meralco also ventured into generation and transmission, enabling them to dictate market prices at will. Here the family of the wife of Sen. Osmena and Meralco appears to have violated the law on cross ownership that will allow them to control prices.

Fire Sale
Suspicions of shady deals also surfaced, largely attributed to certain loopholes in the Epira law on which some capitalists exploited to the hilt. In gist, Epira called for the fire sale of state-owned power assets even at grossly undercut prices from their appraised value.

How and why ethnic Chinese taipan Henry Sy ventured into power when his core businesses revolved around retail, his flagship that catapulted him to become one of the world’s richest.

It may be gleaned from how the cash-strapped government resorted to a fire sale just to dispose of its power assets as fast as it could.

From out of the blue, the cash-rich Sy has wrested control of the previously state-owned National Grid Corp. of the (NGCP), the company transmitting power to its franchise areas across the country.

Once Napocor’s money-spinner because of its extensive transmission network, NGCP – formerly called Transmission Corp. (Transco) – was sold to Sy for just US$3.95 billion in early 2000.

The taipan, known for his shrewd sense of business, made a down payment of US$987.5 million and promised to settle the balance of US$2.962 billion or P148 billion within 15 years. Why this was allowed had many guessing the answers but surely raised eyebrows while stirring suspicion of another sweetheart deal.

No Such Efficient Market
But reckoned with its strong balance sheet, the NGCP has been making P15 billion annually, hence its income in 15 years would work to P225 billion. That translates to P77 billion profits for Sy.

Amid the power industry’s bleak outlook, calls are mounting to repeal or amend the Epira law by nationalizing or de-privatizing the highly cartelized power industry.

By and large, the power industry is just too important to the national economy to be left to free market forces.
In most countries, power is highly regulated, owned by the state to a substantial degree, and subsidized by public funds.

Looking back, the EPIRA law was apparently enacted on the premise of an existence of an efficient free electricity market, uninhibited by government.

Unfortunately, there is no such market in the Philippines. Its electricity market is controlled by an oligopoly.

Foreign Interests
While debates are split on whether to nationalize or not the power industry by scuttling the Epira law, there are those who expressed caution against such move.

In a joint statement last week, some groups representing foreign businessmen believe that scrapping or amending Epira will not solve problems hounding the power industry, but will confuse investors regarding the investment climate in the country.

“If EPIRA is sent back to Congress for review, the uncertainty it will introduce into the regulatory regime of the power industry will lead to a potentially chaotic system, and worryingly put our future needs at risk at a time when our supply of power is marginal,” the statement read.

It warned that without stable rules and good investment climate in the energy industry, international and local investors will steer away from making investments in that sector.

But among lawmakers, there’s an emerging consensus that Epira has failed to promote free competition to benefit the consumers and likely to push for some changes in the government’s power privatization policy with a nationalization bias.

Any paradigm shift can’t gloss over the fact that the law has been used as smokescreen to hide patterns of collusion, monopoly and oligopoly among industry players to deceive the consumers without even knowing that they are being robbed.

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My Fearless/Fearful JLN Forecast!

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As of our Press Deadline, Janet “Jeny” Lim-Napoles was still at the Ospital ng Makati. While the World was questioning why she had not been returned to her court designated place of detention at the PNP SAF camp in Santa Rosa, Laguna, the Authorities were pointing fingers at each other.

The Makati RTC Branch presided over by Judge Almeda said that there was no need for a Court Order to return her to where the Court had committed her. Her custodian, the PNP, said that she had not paid her hospital bills and therefore could not get a discharge or release order from the Ospital ng Makati. The Ospital ng Makati said that they had already issued a discharge order. Besides, they said that it is against the law to hold a patient because of non payment of medical bills or expenses.

Then we hear that JLM wants to stay in the hospital for at least three months. That is what the rich and infamous always want to do. Former Presidents Estrada and Arroyo were committed to the Presidential Suite of the Veterans Memorial Hospital. Former PCSO Chairman and Director Manoling Morato stayed at the SLMC, QC. Gov. Antonio Leviste and Rolito Go spent a portion of their sentences in various hospitals as well as special accommodations at the National Penitentiary at Muntinglupa.

My Fearless Forecast is that if JLM is brought back to Santa Rosa, her list of Senators, Congressmen and Executive Officials involved in the the PDAF/Pork Scandal will come out in its entirety. My Fearful Forecast is that if JLM continues to be detained at the Ospital ng Makati, her list will again be censored, evaluated and manipulated to implicate PNoy’s enemies and protect his allies, friends and KKK’s.

My very educated guess is that while JLN (born January 15, 1964) started out in business dealings with the government fifteen years ago, she made it big when she learned and graduated to the level of PDAF.  This was during the GMA Administration between January 2001 and June 2010. She and her husband, Marine Major Jaime “Jimmy” Napoles, were charged in connection with a 1998 3.8 million peso Kevlar Helmet Procurement Contract divided among seven dummy corporations. Her husband was dropped from the case. Janet was acquitted in 2010.

By the time of the May 2010 National Elections, JLN had accumulated huge sums of money from the multi billion peso Ghost Deliveries of fake Projects of JLN NGO’s. My Guess is that JLN gave the Noy – Mar/LP Campaign a big campaign contribution in the hundreds of millions of pesos. And that is why JLN’s Scam phased in effortlessly into the Aquino Administration of the “Matuwid na Daaan”.

The Expose of the JLM PDAF Scam was triggered by the serious illegal detention of Ben Hur Luy from Dec 19, 2012 to March 22, 2013 by JLN and her brother Reynald “Jojo” Lim.  On the behest of Ben Hur’s parents, the NBI rescued him from a JLN house that was being used as a retrest house. While in NBI protective custody, Ben Hur started to about JLN’s operations. Meanwhile, JLN continued to harass Ben Hur and use influence and wealth in her favor. JLN retained the MOST Law Office.

However, on July 12, 2013, the PDI came out with a series on the JLN PDAF Scam. In the meanwhile, Social Media had discovered and encountered the high living lifestyle of the Lim – Napoles Family. A month later, on Friday, August 16, Netizens almost spontaneously called for a Million People March and Rally at the Luneta for Monday, August 26, a holiday.

Meanwhile, the NBI – DOJ – Ombudsman investigation and prosecution as well as the Senate Blue Ribbon Committee’s Hearings focused on the three opposition Senators, namely Senators Enrile, Estrada and Revilla to the neglect of other Legislators, Executive Officials and NGOs.

Meanwhile, the serious illegal detention case filed by Ben Hur Luy against JLN and Reynald “Jojo” Lim matured under media and public watch from NBI Investigation to DOJ Prosecution and finally the issuance of warrants of Arrest by the Makati RTC versus Jeny and Jojo. This was followed by the posting of a reward for information leading to Janet’s arrest.

After hiding for several weeks, Janet surrendered to President Aquino and DILG Sec Mar Roxas in Malacanang after a nightime “Hide and Seek” with Presidential Spokesman Lacierda. Then, Noy and Mar escorted JLN to Camp Crame. The purpose of the whole charade was to secure JLN’s cooperation in the one sided Investigation and Prosecution of the three Opposition Senators.

Meanwhile there was the promise of comfort and leniency for the VIP Accused Criminal and Detention Prisoner. However, six months passed with no hospital arrest as promised. That is why the Lists started to threaten to come out.

Tremors In The Economy

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By Al Labita

 

  • Foreign funds are dumping local stocks and shifting them to other emerging markets abroad
  • Unabated capital flight raises questions about the BSP’s role as the state’s financial watchdog
  • Fleeing capital signals loss of investors’ trust in government and economy
  • Foreign credit rating agencies stall investment upgrade due to perceptions of corruption plaguing the Aquino government

 

Monetary authorities may not admit it, but unmistakable signs point to what could be financial tremors shaking the country’s economy.

At the stock market, share prices are plummeting, dragging down prices of listed companies — and profits of investors.

Now trading at precariously below 7,000 points, the Phisix – the stock market’s barometer – has come under siege as more foreign funds dump local counters and shift them to other emerging markets abroad.

Also referred to as “hot money,” the funds come and go anytime as investors deem fit. Usually interest-bearing, they are parked in stocks, government securities and money market.

Bangko Sentral ng Pilipinas (BSP) data showed that in this year’s first quarter alone, investors pulled out a whopping US$2.1 billion from the market, sending stock prices tumbling to new lows.

The seemingly unabated capital flight only showed how foreign traders had exploited to the hilt the

BSP’s foreign exchange liberalization policy at the expense of a sagging economy.

Loss Of Trust

Amid surging constraints hounding the financial market, the BSP may have to reassess its policy and attune it to the imperatives of the times.

Interestingly, the outflow of foreign currencies surpassed their inflow in the first quarter as portfolio investors offloaded peso-denominated assets.

At any given trading day, foreign funds account for over 60 percent of market liquidity, thus their adverse impact on stock prices when withdrawn.

The withdrawal, an alarming indication of loss of confidence in the economy, meant that the Philippines has lost its luster as an investment haven.

It came on the heels of reports that foreign credit rating agencies – Fitch, Moody’s and Standard & Poor  — had become discriminating in backing sovereign debt issues, including those of the Philippines.

But in the past and in exchange for the Aquino government’s three billion pesos service fee, they would readily upgrade the nation’s credit standing.

Investment Grade

A favorable rating affords the debt issuer low interest rates and other concessions from creditors.

Previously, the Philippines was kept two notches below investment grade, despite reforms

in the economy. This prompted the BSP to call the attention of the rating agencies to discrepancies between methodologies used by the agencies and the actual grades the country got.

Last year, the Philippines earned an investment grade, an indication of the government’s capability to pay its loans.

This was because the Philippine economy grew by 7.2 percent—the second fastest in Asia next to China. It was also better than 2012’s 6.8 percent growth rate.

Though behind the curve in upgrading the Philippines, Moody’s is the only rating firm that has a “positive outlook” for the country. This implies possible upgrade in the next 12 to 18 months.

Credit Outlook

Fitch and Standard & Poor’s currently have “stable” outlooks for the Philippines, indicating that their ratings would stay the same for the next year and a half.

Other upsides going for the Philippines are a sound banking system and a balance of payments surplus, leading to a continuous decline in the debt to GDP ratio — from 68.5 percent in 2005 to 49.2 percent in 2013.

For BSP, it feels confident that the three credit watchers would once again extend a favorable rating of the country’s planned slew of IOUs this year to plug any budgetary deficit, given a track record of 60 consecutive quarters of positive growth.

This time, however, it’s a different story as the three credit watchdogs are overly cautious in stamping their seal of good housekeeping on sovereign debt issues, including those issued by the Aquino government.

One underlying reason is the perception of corruption weighing down on the Aquino government in the wake of the pork barrel scandal.

Another is the deteriorating finances – the national government incurred a fiscal gap of P84.1 billion from January to March this year.

The deficit, despite the government’s belt-tightening policy, was 27 percent more than the P66.5 billion in the same three months of last year.

A Department of Finance report blamed the deficit on expenditures which climbed 12 percent year-on-year, faster than the nine percent increase in revenues.

The multi-billion pesos rehab of typhoon-devastated Eastern Visayas proved costly.

Deficit

The government incurred nearly half of the first-quarter deficit in March when the fiscal gap reached P40.2 billion, 14 percent more than the P35.1 billion a year ago.

Spending and revenue grew at the same pace last month, but the government raised only P129.3 billion whereas expenditures were higher at P169.5 billion, thus the deficit in March.

Also in the red is the country’s balance of payments position (BOP) which, as of last February, showed a gaping deficit of US$4.14 billion, a far cry from the US $1.08 billion surplus booked in the same period last year.

Contrary to expectations, two revenue-raising agencies – bureaus of customs and internal revenue – had miserably failed to improve their  collections due to unabated smuggling and tax evasion, in cahoots with corrupt officials.

The Poor

Government data showed the country’s budget shortfall in the first two months of the year rose 40 percent to P43.9 billion as the government increased spending for the highly politicized reconstruction efforts in disaster-stricken Visayas region.

Another gray area of the economy is that investment pledges approved by the Board of Investments slumped by 52 percent to P47 billion in this year’s first quarter, year-on-year.

Amid signs that the days of cheap money are over, market talk is that not too soon, banks will likely raise lending rates, currently ranging from 16 to 22 percent per annum. Expected to get hurt are small businesses.

The move, largely viewed as anti-poor and pro-rich, forms part of BSP’s policy tools requiring banks to tighten their lending windows to stave off any inflation rate uptick.

What also alarmed foreign credit watchers is the banking sector’s runaway loans to real estate companies amid fears of a property bubble.

RESIGN!

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The die is cast.

The more the pork scam drags on, the more its money trail leads to the centers of power.

From President Aquino, the collateral damage has spilled over to his inner sanctum led by Budget czar Butch Abad.

Abad, who wields the enviable power of the purse, is believed to be the hidden hand pulling the strings behind the pork barrel drama.

The self-confessed architect of the infamous Priority Development Assistance Fund (PDAF) inexplicably made himself scarce since the scam hogged headlines over the past months.

While his peers turned themselves into Pnoy’s own bunch of apologists, the former solon from typhoon-battered Batanes Island kept himself away from public view – and scrutiny.

His silence on the controversy is not only deafening, but also intriguing.

Finally, he turned gutsy last week, apparently bugged by insinuations that he’s the “pork king” alluded to by reports quoting sources close to Janet Lim-Napoles, the alleged pork barrel queen.

“These fresh allegations that I tutored Napoles in designing the PDAF scam are simply not true,” Abad said. He has been used to being called names since he served the Aquino administration starting in 2010.

But ‘‘pork king?” Certainly not, he said, describing it as the “most ridiculous” he ever heard. “It would in fact be funny if it weren’t such a blatant lie.”

Inescapably with Aquino and Abad in the eye of the pork scam, dyed-in-the-wool political allies House Speaker Feliciano Belmonte and Senate President Franklin Drilon can’t be far behind and turn deaf and blind to mounting calls for them to call it quits.

 

“Na-Edca-Han Na Naman Tayo”

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Many Filipinos are wondering, why is it that the signing of a very important pact as the Enhanced Defense Cooperation Agreement (EDCA) which is actually the centerpiece of US President Barack Obama’s visit was not signed by the US and PH presidents? Instead was signed by Defense Secretary Voltaire Gazmin and US Ambassador Phillip Goldberg hours before the arrival of Pres. Barack Obama. To think, the signing was not even witnessed by the two presidents.

Some pundits believe that the EDCA was not signed by the two heads of state, because US does not want to hurt China in the process. So it is quite obvious that every time the issue of how far Uncle Sam will help the country in times of trouble with China (and/or other aggressor) the safe answer of the big brother – “We are not doing this because of China. We are doing this because we have a longstanding alliance partner [the Philippines]. They are interested in stepping up our military-to-military,”  and “we (US) just want a peaceful and safe navigation in the South China Sea”. All rhetoric, but can we fault them in protecting their interests!

We really never learned from the past agreements that we had with the US, always lopsided, favoring the US more and in the end we are shortchanged (again). So the doublespeak of PNoy’s people of not allowing the Filipinos to be shortchanged in the latest pact are all double talk.

Like what the Bagong Alyansang Makabayan (Bayan) and other organizations observed – they have been unimpressed, seeing the EDCA as an open invitation to a molester to offer protection against a touted bully. “The oft repeated rationale,” explained Bayan’s secretary Renato M. Reyes, Jr. is that we need this agreement with the US to protect ourselves from Chinese incursions. So what Aquino is basically saying is, to protect Filipinos from the neighborhood bully, we’re inviting a rapist inside our house to do as he pleases.” (by Binoy Kampmark)

Just like what I have been saying for so long now in my writings and daily radio program – this is rape with consent. Again, no thanks to our leaders.

Furthermore, in this EDCA, the so-called camp sharing operation will make the whole country as Uncle Sam’s military base. So the ‘chubibo’ of not going to build new US military bases here is true because through camp sharing scheme, US will not pay any rent and all the AFP’s camps from north to south of the archipelago will be the US ‘military base’, free of charge, translation – ‘rape with consent’. Need we say more?

And remember, back in August 2009, in her affidavit, Navy officer Nancy Gadian accused the US military of building permanent structures in different military camps in the country. She said US forces have established “permanent” and “continuous” presence in Zamboanga, Sulu and Tawi-Tawi in the south.

She added that the Philippine military has no access to the camps built by the US soldiers in these areas since they are “fenced off by barbed wires and guarded by US Marines.”

Gadian likewise said these structures are indications the US troops had no intention of leaving the country, which is a violation of the Philippine Constitution.

For over a decade now, we are actually being ‘screwed’ with the willingness of past and present administrations in the guise of being part of the coalition of the willing to fight the global war on terror of then President George ‘Dubya” Bush Jr.

And like what former senator Joker Arroyo said “What did the Philippines get out of the Obama visit? Zero.”

Especially on the part of our Filipino war veterans that was tackled by a former ambassador Jose Zaide, a pro- American historian turned patriot in his article (April 28 at the Manila Bulletin) “the more than 250,000 Filipinos who fought for USA in WW2 and shared the same foxholes with US troops were promised equal treatment. But the US Congress 1946 Rescission Act denied Filipino war vets, making a dishonest man of President Franklin Delano Roosevelt.

The Filipino WW2 vets were only collateral damage (add-on) to the Recission Act, which was passed principally for the purpose of controlling excessive claims of US war supplies providers.

In 2009, US Congress threw small bones granting one-time payments of $15,000 to Filipino vets in the USA and $9,000 to those in PH.  More crumbs promised to Filipino vets helped swing trusting Pinoys in USA to vote for re-election of Barack Obama.

Our problem is that the GPH representing the Filipino WW2 vets has one eye cocked at its own shopping list (for hand-me-down armaments and surplus and other USAID).

US Congress, which passed the Recission law, would not reverse itself.  (No constituency in support of granting monies to historical allies.)

On hindsight, Filipino WW2 vets should do their own pleading, i.e., sue the US government at the US Supreme Court, which will be no less noble than the French Court de Cessation and the British High Court.”

As a whole, all the excitement and fanfare that the Obama visit has created in the country are all ‘chubibo’ and sadly, the current administration welcomed the EDCA with open legs. Carol P. Araullo of Businessworld  said the EDCA is a negotiated surrender of our sovereignty.

“Na-EDCA-han na naman tayo”

 

Broadband Interconnection

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BINDER: Many companies have already thrown in their support to the proposed Broadband Interconnection for National Development and Emergency Response. This might sound like the National Broadband Network (NBN), but it is not. NBN is technically just a Value Added Network (VAN), but it does not have Value Added Services (VAS). As I proposed it, BINDER will be not only be a VAN, it will be the backbone upon which an infinite number of VAS could be attached to it, so that these could function and operate.

VAN-VAS ARCHITECTURE: As it was supposed to be (but it did not happen), the government was supposed to build the VANs, and that would have enabled the private sector to attach their own VAS, without spending too much on their own infrastructure. This would have lowered the cost of services, because the private sector would not have too much investment to recover. This is similar to what happened in the case of the network of roads and highways that were built by the government. With these in place, the private sector was able to provide the land transportation services that are now running on these networks.

PRIVATE TOLL WAYS: We pay our taxes and in doing that, we expect the government to build infrastructure like roads and highways. As it happened however, the government was not able to build the superhighways as it was supposed to do, and that is why private companies had to build and operate the private toll ways, and that is why we have to pay money as we pass through. In a way, this is like double taxation, but that is what is happening, because what was supposed to happen did not happen.

INFORMATION SUPERHIGHWAYS: Since the government was not able to build the national broadband networks as it was supposed to do, the bigger companies decided to build their own information superhighways. As it was supposed to be, these private information superhighways were supposed to operate only as VANs, because the original intention was to give the smaller companies the opportunity to provide the VAS components. As it happened, the bigger companies monopolized the business by running their own VAS components in their own VANs, thus leaving out the smaller companies.

INTERNET SERVICE PROVIDERS (ISPs): As it originally happened, the smaller companies were buying bandwidth from the VANs of the bigger companies, so that they could provide services to the general public as the ISPs as we knew them before. As it eventually happened however, the bigger companies started providing internet services on their own, thus breaking the ethical rule that the producers of goods and services should not compete with their own wholesalers and retailers. As it happened, the ISPs went out of business, leading to the monopoly of the VAN-VAS businesses by the bigger companies.

PATCHWORK CAN WORK: Since the bigger companies have already built their own VANs (they all have their own separate networks), it is now possible to build a nationwide (as in national, if you get the drift) broadband based interconnection, by simply patching (as in interconnecting them) together, to the extent that they would allow it. For many years now, I always find myself in the company of government planners who would always want to build a “brand new” national broadband network, instead of a patchwork. They would be in the right place if they were working for a superpower, but there is really nothing wrong if a developing country would choose instead to patch together what is already there.

FOUR MAJOR TRENDS IN COMPUTERIZATION: The four major trends in computerization are (1) cloud computing, (2) big data, (3) server virtualization and (4) storage scalability. As it used to be, private companies and government agencies had to invest a lot of money in building their own data centers, thus incurring too much costs in servers, storage and facilities management. As it is now however, they have the option of getting (acquiring) these services from “the cloud” (meaning from remote offsite locations). As it used to be, it was very difficult to manage and mine huge data assets in an economical and efficient manner. As it is now however, there are newer technologies to manage and mine the “big data” robustly, no matter how big and diverse it is. As it used to be, hundreds of servers were needed to run big data centers. As it is now however, servers could already be “virtualized”, thus needing lesser servers and smaller space. As it used to be, servers and storage devices were “married” as one. As it is now however, these are now “divorced” and the storage spaces are now scalable.

THE BETTER SIDE OF BUSINESS: I worked for San Miguel Corporation (SMC) when its corporate motto was still “Profit with Honor”. The motto is long gone, but SMC along with many other companies are now practising “Corporate Social Responsibility” (CSR for short). As it used to be, corporate philanthropy was a one way street, meaning that corporations gave money to worthy causes without expecting anything back, except perhaps a good image and goodwill. As it is now however, corporations have the option to get back something from their donations, in the form of tax credits that they could deduct from their net taxable incomes. It does not really matter whether corporations would give donations in exchange for something or for nothing, as long as they give to worthy causes.

SYSTEMS INTEGRATOR AND PROJECT MANAGER: Many companies in the Information and Communications Technology (ICT) sector have their own CSR programs in pursuit of their own corporate objectives. Since I know many of the officers from these companies, I volunteered to become the “Systems Integrator” (SI) and “Project Manager” (PM) of a shared network that would be built from a patchwork of donated hardware, software and services, combining whatever surpluses they could donate. This is now the BINDER project.

For feedback, email iseneres@yahoo.com or text +639083159262

Money Wins

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By Ray L. Junia, publisher

Binay is aware of MVP’s anti-politics stance, but feels his much-vaunted technocracy is what the country needs in the face of a globalizing economy.

 

Speculations are rife that business mogul Manuel V. Pangilinan (aka MVP) may yet throw his hat in the political arena come 2016.

That depends though on the ongoing talk between the emissaries of Vice President Jojo Binay and MVP for their possible tandem in the next presidential elections.

From the rumor mill, word leaked that Binay personally handpicked his emissaries, some of them MVP’s Ateneo classmates and business leaders, to persuade the tycoon to join politics.

That was the same tact used by then presidential bet Richard Gordon in the last national elections when he wanted to rope in MVP as his running mate, but the tycoon begged off.

Binay is aware of MVP’s anti-politics stance, but feels his much-vaunted technocracy is what the country needs in the face of a globalizing economy.

Capital Market

MVP, an IVY League-trained investment banker, has built a multi-billion peso corporate empire, spanning from Indonesia to Thailand, Hong Kong and the Philippines, under the umbrella of Indonesian conglomerate Salim Group. Their businesses cater to every human need – from womb to tomb.

Some of the MVP-steered companies are among the biggest – in terms of assets and revenues — not only in the Philippines, but even throughout Asia as well.

They include the blue chips Philippine Long Distance Telephone (PLDT) and Meralco whose listed shares allow the public to own them via the Philippine bourse.

In more ways than one, PLDT and Meralco help woo foreign investments in the capital market, an integral part of the economy.

Being public utilities, their rising rates may drag down, however, MVP’s popularity come election time.

Campaign Weapon

Most likely, other contenders will associate MVP with a regime of high prices as a campaign weapon against him.

But politics is a game of numbers which often fluctuate depending on prevailing risks and opportunities.

Taking all things equal, MVP may yet emerge as a surprise package, given the rough-and-tumble nature of politics in a country long driven by partisanship.

There’s another hitch to Binay’s likely choice of MVP for the nation’s second highest public office.

The plunder cases notwithstanding, Senator Jinggoy Estrada minced no words in making himself available as Binay’s second in command for the 2016 polls.

Jinggoy’s preference has caught Binay in a bind since they belong to the opposition party UNA along with Jinggoy’s father, Manila Mayor Erap Estrada, and Senator Juan Ponce Enrile.

Why MVP?

Batangas Governor Vilma Santos, wife of Senator Ralph Recto, and Gawad Kalinga founder Tony Meloto are also being bruited about as Binay’s possible running mate, but both have declined so far.

Reckoned with the credentials of movie actress-cum-politician Santos-Recto and low-cost housing builder Meloto, why MVP?

So far, only Binay has openly declared he’s gunning for the presidency when Aquino’s six-year term ends by 2016.

As if MVP is on top of the heap, so to speak, Binay somehow hinted his bias and preference for the tycoon as his running mate for VP.

“If possible, the person should have a track record that will be of help to us in improving the country. Who can give that but of course an economist,” he said, apparently referring to MVP, himself an economics graduate cum laude from the Jesuit-run Ateneo de Manila.

No Formal Talk

Citing his experience as a local government executive, Binay recalled the days when he was mayor of Makati city, the country’s financial hub.

“One of my guiding policies when I was a mayor was to run the city government of Makati as if it were a corporate entity, “he said.

In wooing MVP into his fold, Binay believed he could prop up the values of efficiency and effectiveness in governance to get votes once the campaign in the run-up to 2016 heats up.

He noted that MVP’s experience as an investment banker could be an advantage to the new government as funds would be needed to push projects that address poverty, unemployment and other socio-economic ills plaguing the country.

Binay clarified though that he has not had formal talk with MVP who began his career as an investment banker in Makati city in the early ‘60s.

Technocrat

Although they met on several occasions, Binay said, they did not discuss the 2016 polls.

Once rumored eyeing the presidency, MVP stands out as one of the most powerful men in the country, being at the helm of companies that are leaders in industries considered crucial to the Philippine economy.

These include the infrastructure giant Metro Pacific Investments Corp., biggest gold producer Philex, as well as Metro Pacific Tollways Corp., and Maynilad Water Services Inc.

So far, MVP has kept mum on what may be described as a snowballing move to draw him to what could be his unchartered territory – politics.

Last year, some political commentators believed that MVP evoked strong potentials for either as president or vice president, citing his impeccable credentials as a business leader and a technocrat.

They noted how he turned around the once loss-making companies such as PLDT into highly profitable ones because of his management skills and expertise.

Outburst

But MVP, who has long shunned politics, said in a statement that “there is no political blood that runs through my veins… I believe I can serve our people better some other way.” To him, his role as a businessman is enough to help the country’s economy grow.

Nonetheless, the tycoon agreed that elections ‘provide a rare opportunity to define the country’s long-term economic and social priorities, and form a broad consensus around them.”

That sense of optimism is a far cry from what he uttered some two years ago – “kung ako lang,” he was quoted as saying, “I’d pack up and go back to Hong Kong,” headquarters of the Salim-owned flagship First  Pacific Co. Ltd. “Ang gulo-gulo n’yo!” (You are troublesome)

That infamous outburst, which has gone viral on the internet, was an angry reaction to how critics demonized him for kowtowing to Beijing in his bid to form a joint venture with a state-owned Chinese company to explore oil in the Spratlys, claimed by both the Philippines and China.

Likening MVP’s move as “sleeping with enemy,” critics lashed out at him over his plan to allow the Chinese to explore part of the nation’s territory.

MVP may cite one plausible explanation that business is business since his group holds a substantial stake in the exploration rights granted by the Aquino government to an oil field in the Spratlys, also referred to as west Philippine sea.

Whatever it is, the torrent of criticisms could be a litmus test of MVP’s expected transition from a hassle-free corporate milieu to the abominable dog-eat-dog world of politics.

MVP Is The Wrong Leader 

To MVP, abominable is not how he would describe Philippine politics even with his pretensions to be fed up with the dirty ways of our politicians. From all indications he has mastered the art of Philippine politics as he has turned out to be the master of many of the country’s political leaders.

It is common suspicion that many of the country’s political leaders are in the payroll of big business. And MVP is one at the front of big business. This suspicion has earned credence from the favored concessions big business get from the government.

That MVP could be tempted to run for vice president or president is a perception created by MVP himself. That the thought sometimes flirts in his mind could be a product of his experience in making his principals’ money win candidates who don’t deserve to be in office.

Should MVP take the dive into politics, preferring not to be simply the manipulator, there is strong reason he will win. He has command of billions of pesos in money machines and control over national media.

Then we will have placed another wrong person to lead this country from poverty, for while he has been active in corporate social responsibilities and sports, the truth is, he is one of the major reasons the country is very poor and why millions are without jobs and penniless.