If our gov’t geniuses can’t ‘fix’ NAPOCOR, we cannot save the peso

Let me say it again.

Two weeks ago, in this corner, this writer revealed that a major reason – probably the major reason – for the plummet of our Philippine peso was the runaway and astounding losses of the government-run National Power Corporation.

The GMA government has been blaming everything and everybody else for the peso’s disastrous slide. I suggested the government look in the mirror. It’s not political instability, not even the candidacy and the possible victory of an allegedly "ignorant" and untried FPJ nor the open-ended threat of coups. It’s the reality of the monstrous and mystifying losses, plus mounting foreign debts and debt-servicing of the giant NAPOCOR.

Imagine that: NAPOCOR lost P90 billion last year, in 2003. This year, I pointed out, NAPOCOR will probably lose between P150 to P200 billion. After that item appeared, the silence from NAPOCOR and the government was deafening.

Yesterday, the peso plunged further but finally closed at P56.25 to the dollar. Bangko Sentral ng Pilipinas Governor Rafael Buenaventura, since it’s his thankless job to defend the peso, had to put an optimistic spin on the terribly bleak situation by asserting that the peso’s fall was only a "temporary blip". Well, it’s been blipping discouragingly week after week, with the bottom not yet in sight.

One prominent businessman whose enterprises employ thousands of people, bleakly told me the other day that, "after the elections, when the government stops desperately propping up the peso, the exchange rate could go as low as P70 to the dollar." Gosh! Put on the brakes, GMA!

I know it’s the dizzy campaign season, but if your Wharton-Harvard-Yale-Georgetown-Ateneo-De La Salle-AIM Katzenjammer Kids, and your brainy Energy, DTI, DOTC, etc. officials, all loaded down with tons of diplomas, can’t get NAPOCOR out of the dumps and the poorhouse and somehow unload its assets and debits on some buyer or sucker (no midnight sweetheart deals, please, with the poor taxpayers saddled with the crumbs and the deficit), our currency could go kaput.

Why did the NAPOCOR get into the hole, with such top I.Q. Cabineteers as former Finance Secretary Lito Camacho, an international investment banker and broker (Code NGO, etc.), keeping an eye on the external debt, the monstrously mounting deficit, and our financial comings and goings? The minute Camacho jumped ship, by golly, he began sounding like an opposition critic – of his own government, perhaps of his own record. At least he subsequently subsided into silence. In fact, President GMA even . . . well, in a way "praised" him.

And what about Energy Secretary Vince Perez, former Trade and Industry Secretary Manuel "Mar" Roxas (now running for Senator as Mr. Palengke), and DOTC Secretary Larry Mendoza (a former police chief, and a general from the Philippine Military Academy)? Didn’t they spot NAPOCOR’s travails and rush to address and defuse them? Could they have solved the problem, or were they a part of the problem?

The President and her merry men (and women) cannot pass the buck on NAPOCOR’s tragic state and the fact that our government finances are hemorrhaging from that gushing faucet. These disasters took place during GMA’s watch and under her Administration.

* * *

Don’t take my word for the NAPOCOR problem. Following my article, the Biznews Financial Gazette (Feb. 16-22 issue) conducted its own inquiry and came out with a headline article by Luis Leoncio, pronouncing: "$2 B needed for Napocor."

Biznews noted that NAPOCOR’s "privatization drags on" with the Arroyo government blaming Congress for its failure to pass "key reform bills".

Aside from the funding it will have to generate (remember, US$2 billion) for NAPOCOR’s current operations, the Gazette said, "The delay in the privatization of NAPOCOR assets could mean total annual costs of another P50 billion, or P25 billion in foregone savings due to financing costs and another P25 billion in annual losses. In all, NAPOCOR results in a $3 billion burden for the government this year." Wow!

The government has, the piece discloses, run for help in such institutions as the Asian Development Bank (ADB), which is expected "to back a loan scheme as guarantor to fund most of the funding needs". Then there’s the Dutch financing firm ING Barings which – the Biznews Gazette alleges – has "also proposed to underwrite a $250 million bond float planned for NAPOCOR in the first quarter of next year to fill the requirements".

It has to be underscored that those are borrowings – you said it: More loans, to be repaid by us, and are not capital infusement. Poor Juan de la Cruz! In the old days in Europe, we would be headed for Debtor’s Prison. In our country, though, those who borrow endlessly, instead get promoted and lauded by our government. Who gets struck with the bill? You, me, our children and grandchildren.

What’s alarming is what Biznews further revealed: "NAPOCOR’s obligations represent about 25 percent of the national debt." Gadzooks and Godzilla: One fourth of our national debt!

Summing up, the researcher explains that "NAPOCOR has been incurring huge losses due to the cost of its foreign borrowing, the depreciation of the peso and the failure of power distributors to fully take up committed power supply".

Here’s the clincher: "The firm expects 2004 net losses to balloon to P113 billion, more than half of the government’s proposed budget deficit of P197.8 billion, from an estimated P75 billion loss in 2003."

There you are. I still say, the NAPOCOR didn’t lose just P75 billion in 2003, but P90 billion.

* * *

Disney in the United States has just, but barely, beaten off a hostile take-over bid by US cable giant Comcast (mainly before Disney’s shares in the New York stock exchange went up, while Comcast’s dropped, thus making the bid unfeasible). It was a close shave, however. Mickey Mouse might have been captured by a new management. (In a counter-attack, Disney acquired Kermit the Frog, Miss Piggy, and the Muppets).

Perhaps our government might ask help of the Disney Corporation – since our peso is headed for "Mickey Mouse" status.

GMA doesn’t need enemies or political rivals. If she doesn’t wise up, her own "geniuses" and smart operators might do her in.

* * *

I got this yesterday – so here it is:

"Is FPJ too scared to debate?" asked publisher Max Soliven in his Feb. 22 column. Of course not. FPJ himself has said that he is ready for it, but he believes there is a time and place for such a talkfest.

FPJ is a man of few words and more action who, at this point in the presidential campaign, has been busy going around the country communicating his message on the urgency of winning back our people’s faith and confidence not only in their government but in themselves as Filipinos.

As regards your forecast that FPJ’s campaign may fizzle out soon, we believe this is groundless, given the record number of people who thus far have taken to the streets during KNP motorcades and have attended its rallies in Bulacan, Bataan, Pangasinan, Caloocan, Nueva Vizcaya, Isabela, Cagayan and even President Arroyo’s home province of Pampanga.

(Sgd.) RODOLFO T. REYES

Former Press Secretary

Head, FPJ’s Media Bureau

C’mon, Rod. As a former Press Secretary, and an old journalistic pal of mine (a journalist of the year, no less), you know the critic’s role. An opinion writer tries to dish out what he believes is honest opinion. It’s an opinion, not the end of the world. Mabuhay!