Why not an exchange for oil, drugs, dairy? - Gotcha

Not one of Energy Secretary Mario Tiaoqui's arguments washes. He calls the setting up of an Oil Exchange "a return to regulation." He claims it will build a new bureaucratic layer. He says it won't work.

To all this, Oil-Ex proponent Rep. Tet Garcia has but one rejoinder: If the idea of an exchange is good enough for the electricity sector, why can't it be good for the fuel sector as well?

With that, Tiaoqui can only mumble to himself. For, he had pushed for inclusion of such an electricity exchange in the Omnibus Power Bill. He had heard of it in California, Garcia went there to study it.

California officials set up the exchange only a few years back. Power firms in and out of state bid monthly to supply electricity to factories, offices and homes. The exchange does not care how the firms produce their electricity -- from windmills, hydroelectric plants or gas turbines -- so long as the supply is stable. It simply awards the supply contract to the month's lowest bidder. Californians get cheap electricity that does not fluctuate or conk out.

Garcia realized that the idea can be applied to fuel as well. More so since crude oil, gasoline, diesel, kerosene, av-gas and LPG can be stored for longer periods and transported over longer distances than electricity. He filed an Oil-Ex Bill which President Joseph Estrada instantly promised to certify as urgent, with a remark, "Why didn't we think of this earlier?"

An Oil-Ex would accept bids from refineries and supertankers all over the world to supply crude oil and fuels to RP factories, transport firms and homes. It would invite the Big Three -- Petron, Shell, Caltex -- to participate in the forward biddings, since they have refineries in Luzon and nearby countries. Same with Manila's new players who have cheap sources in Asia.

Garcia waited two months for the Malacañang certification that never came. He found out that Tiaoqui had talked Estrada out of it. Not only that, Tiaoqui got other former Ateneo classmates Jose Pardo and Rafael Buenaventura to thumb down the Oil-Ex in their

How Pardo and Buenaventura did that, only they know. But it's strange, for another ECC member, Trade & Industry Sec. Mar Roxas, has been toying with the exchange idea, although for another industry -- pharmaceuticals.

Roxas and Health Sec. Alberto Romualdez had heard of India's system of directly importing drugs from manufacturers and distributors. At the same time, it offers incentives to in-country makers of branded and generic drugs, whether synthetic or herbal. That's why medicine in India costs eight times cheaper than in RP.

Improving on India's system by setting up a drug exchange could also bring down prices in Manila. A Drug-Ex would entertain bids not only from new foreign sources but also companies that have laboratories in RP. It would reduce drug makers' expenses for promotions by making government health workers responsible for educating drug buyers and retailers about each preparation.

Why, the exchange idea can also work for other sectors that depend on imports of raw materials or finished products. Dairy, for instance. RP produces only 2 percent of the milk it requires, and companies that need it are forced to sign long-term contracts to assure themselves of steady supply from abroad. A dairy exchange would help them get supplies from the cheapest sources.

RP cement firms may initially oppose the setting up of a cement exchange as well. They will say that countries like Taiwan will dump its cement in Manila, as it is doing now by undercutting local makers by 10 percent. But then, RP cement traders can buy Taiwanese cement from the exchange and ship them back to Taiwan at the higher prices there.

Globalization is leading to liberalization, which in turn is leading to lower tariff rates imposed by the World Trade Organization. The answer of semi-industrialized countries like RP to the transfer-pricing by oil, pharmaceutical and other multinationals is the exchange idea.

INTERACTION. Tony Carreon, earthlink.net: Thank you for omitting my name as one of the "destabilizers" of Erap's reign (Gotcha, 18 Mar. 2000). Remember I am one of those unfortunates who eat sardines, cannot afford to drink Petros wine or wear Brioni jackets, but fortunate enough not to buy BW shares.

Hubert Duvali, hotmail.com: Erap, Loi, Jinggoy missed Sr. Christine's point. It's not how PCSO funds were used (presumably for the good of the poor), but how the three of them, just by themselves, could determine how 80 percent of the funds should be used, to the detriment of smaller charitable institutions.

Is paranoia contagious, Tony, Hubert?

Orlando Ramirez, mailcity.com: RP's foreign office stinks. It recalled a controversial envoy from Lat-Am. The deputy stayed behind, seeking extension. To think that he's not a career diplomat but a Marcos political appointee.

Henry Ong, Manila: RP requires $75,000 for a special investor resident visa. Immigration charges SIRV holders a fee whenever leaving RP. First, it was P635; then, they raised it to P1,220; last Jan., it became P2,520. That's no way to entice investors.

Zach569, hotmail.com: There's tension here at the Local Water Utilities Admin. Last Mar. 8 his four deputies --Simplicio Belisario, Emmanuel Malicdem, Rodolfo de Jesus, Daniel Landingin -- sued Administrator Prudencio Reyes for graft in advancing P25 million to a contractor. Reyes in turn fired Belisario, De Jesus and Malicdem. Is this happening only at LWUA?

Are you kidding, Zach? Ever heard of SEC, PCSO, OPS?

Thank you, Ricardo Villaflor, Zen Udani, Angie Perez, Rene Catal, Dino Bernal, Nilo Orocio, Joselu Legarda, B. Simpao, Cris Argosino, Bing Ramos, Alejandro Melchor, Rodel Ocampo, Luisito Sheng, Juan Cruz of Naic, Cavite, Fabian Santos of San Simon, Pampanga, Jonathan Dy of BF-Las Pinas, Danny Maclan, Cesar Jornacion,

YOUR BODY. Heart problems triggered by Viagra are extremely rare, shows a new analysis of 82 studies on the popular anti-impotence drug.

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