03 June 2008
– The Freedom from Debt Coalition today added its voice in denouncing the opposition of the Joint Foreign Chambers of the Philippines (JFC) to the idea of amending the Electric Power Industry Reform Act (EPIRA) and renegotiating onerous contracts with independent power producers (IPPs) to bring down electricity rates.
Members of JFC include chambers of commerce of the United States, Australia-New Zealand, Canada, Japan, Europe and Korea that sent a joint letter to Mrs. Gloria Macapagal-Arroyo on May 27.
In a strongly worded statement, FDC hit JFC’s business framework of capitalism without risk and its ‘shameless use of blackmail politics’ to protect their corporate interests in the country.
“Since foreign chambers of commerce are here to promote and protect their respective national/global interests, it is expected of them to defend their IPPs and their windfall of profits. The problem is: who’s going to protect ours?” asked the FDC.
Most of the IPPs in the country, according to FDC, are foreign-owned. IPP contracts consigned Filipinos to pay even for electricity that were not generated nor consumed.
“What the IPPs enjoy is capitalism without risk and this is the ‘business as usual’ framework that the JFC wants to maintain. Of course they'll want that and they don't care at whose expense,” FDC said, adding: “While we, Filipinos, call it capitalism without risk, our fellow Indonesian activists call it organized crime.”
Making further broadside at JFC’s credibility, FDC argued that it was also these foreign chambers of commerce, in partnership with the International Monetary Fund, the World Bank and the Asian Development Bank, that elbowed the government into providing sovereign guarantees to IPPs (through the take or pay provisions in the contracts) to make power generation a ‘risk-free’ business in the country.
“Filipinos should rather look at foreign IPPs not as their savior but the typical thieves who took advantage of the dark periods of the 80s and 90s to pull off their grandest robbery in band,” said FDC.
In its letter to Mrs. Arroyo, JFC said renegotiating the IPP contracts amounted to a major disincentive to investors intending to build the required additional power generation capacities or to participate in the government's privatization program.
It also warned that the move will not only dampen the confidence of both foreign and local investors but could even drive them away at a time when shortages in power supply already plague the Visayas and are expected in Luzon in the next several years.
“Evidently for JFC, the only way to defend their IPP business in the country is by making this threat of a pull out a veiled instrument to insulate the IPP contracts. This is blackmail politics,” FDC said.
And to say further, without shame and remorse, that ‘competitive pricing is vital to a healthy and competitive economy’ is, according to FDC, the height of JFC’s selfishness and insensitivity to the plight of Filipinos.
“If for them these notorious IPP contracts represent ‘competitive pricing’, that is another way of saying that the power purchased adjustment or PPA that we continue to pay for unused electricity is a legitimate, ethical and moral obligations that Filipinos have to honor. Thus, the challenge now is on whose interest the Arroyo government is going to uphold -- the Filipinos’ or the foreign IPPs’,” the group said. -30-