NGO backs lawmaker’s plan to input power rate hikes in wage reviews

The call of Sen. Manuel Villar Jr. to include power rate increases as part of its wage reviews across the country is a realistic move, said the Foundation for National Development (FND).

"Such an idea can only come from a national leader who has a firm grip of the economic realities in the country," said FND chairman Antonio G. Hombrebueno of Villar’s recommendation. "His call places the national situation in the right perspective, steering clear of all-too-easy rhetoric marked by misplaced populism," the NGO chief added.

The lawmaker was quoted as saying that labor officials "should consider the impending increase in utility rates in conducting wage reviews, alongside increases in oil prices and transport fares."

For example, the prices of crude oil have risen by 42.6 percent from last year. Many of our power plants run on crude oil. Also, in the foreign currency area, the Philippine peso has dropped by 50 percent compared to the dollar over the last five years. The continued devaluation of the peso against the dollar is reflected in the prices of IPPs. "These are externally driven factors," Hombrebueno said, "and are not within the control of our industries."

"I have always said that it’s not wise to keep artificially low prices," Hombrebueno pointed out, "because somebody has to subsidize these unrealistic rates — and that somebody is the government. That explains the huge deficit of the National Power Corp. (Napocor) whose prices have been unrealistically depressed. That makes Napocor a burden to government — and that makes every Filipino share its gargantuan debt burden."

"Napocor’s prices are, therefore, not the true gauge of market rates," he added.

To address the depressed condition of the market, the government must seek to create an environment where investors come in with their funds, build factories and other establishments, create jobs, increase our people’s incomes — and therefore enable them to pay for modern day conveniences — including electricity.

Villar’s approach is what we need in the country today. "It is our wish that other officials will take such a tack so that we should be well on our way — first, to solve our immediate problems; and second, to bring us on the road to economic recovery."