Cynical

Sen. Risa Hontiveros, Rep. Carlos Zarate and the Makabayan cabal called on the distribution utilities to extend the grace period for customers unable to pay for the electricity they consumed. They are cynically exploiting the distress to score cheap brownie points.

These politicians attempting to politicize utilities payments could not be unaware that distribution charges constitute a very small portion of the final bill customers must deal with. The largest portion of that final bill is the generation charge.

The payment for power generation simply passes through the distribution utility and goes to the generating plants. Part of that, in turn, goes to paying fuel inputs and other overhead costs including wages.

The generating companies pay for their input costs in full and on time. The distribution utilities, such as Meralco, have been paying the generating companies in full and on time. If the moratorium on consumers paying their bills is extended, the payment chain will be broken. The power industry will be bankrupt.

The weakest link in this payment chain is the electric cooperative. This is simply because the cooperatives do not have much financing options to keep their operations going even if payments from their customers are delayed. If they shut down because customers are not paying, the economic costs will be unimaginable.

When the economy was shut down due to the pandemic, the Energy Regulatory Commission (ERC) pleaded with the distribution utilities to observe a “no disconnection” policy until November last year. This would bring momentary relief to poor consumers. ERC chair Agnes Devanadera, in a recent radio interview, acknowledged that the “no disconnection” policy should go on indefinitely. It will cause disruptions that would be costlier for the economy – and, by extension, to the customers themselves.

Even as the “no disconnection” policy prescribed by the ERC was set until the end of November last year, Meralco extended it on its own initiative to the end of January for households consuming less than 200 kWh per month. The distribution utility nevertheless pays the power producers in full and on time.

All of us recognize that poor households have difficulty paying their electricity bills. But there is no other recourse. Extending the “no disconnection” policy will only push the poorer households into bigger debt to the distribution utility. Unless they exercise credit discipline, these poorer households will all the more be unable to meet their obligations. The payment chain will be broken. The entire energy sector will be in direr straits.

Instead of agitating for an extension of the “no disconnection” policy, the leftist politicians should address the FIT-All subsidies given to giant “renewable” power producers. These subsidies are awarded without public consultation. They ensure the profitability of a few favored investors while forcing a general increase in the cost of power across the board.

Disentangled

Under Philippine laws, “syndicated estafa” is a terrible crime to be accused of. The person charged with this crime can be jailed without bail. For this reason, prosecutors and judges will have to be extra judicious in admitting “syndicated estafa” charges.

We will recall the case where a major property developer with a large project in Pampanga was charged with “syndicated estafa.” He spent many years in the provincial jail before the charges were appropriately modified, allowing him to post bail.

The charge of “syndicated estafa” is likewise central to the high profile legal tangle between two wealthy families: the Cebu-based Gaisano clan and the patriarch David Wong Chi Yin and his children Derwin, Derick, Davidson and Diane.

This story began after Derwin Wong and Eda Frances Gaisano became a couple. Because of that relationship, the Gaisano family invested some P234 million in DW Capital, Inc. (DWCI), a securities trading firm established by David Wong and on whose board his children sat as directors.

When Derwin and Eda separated, several Gaisano family members sued DWCI for “syndicated estafa.” They were the only ones among all the firm’s clients to do so.

The Office of the City Prosecutor of Makati found there was not enough evidence that five or more people conspired in organized swindling to qualify as “syndicated estafa.” Valerie Gaisano-Sebastian brought the same case to the Office of the City Prosecutor of Cebu City. The Wongs brought the matter to the DOJ, concerned about the independence of the prosecutors there. A special DOJ panel formed to review the matter recommended the dismissal of the Cebu case since the alleged wrongdoing happened in Makati, where the DWCI holds office.

Notwithstanding, Valerie refiled the case in Cebu and the court issued an arrest warrant for Derwin and his siblings. Valerie even offered a P2-million bounty for the arrest of patriarch David Wong who she claims fled to Taiwan.

However, on July 18, 2019 Cebu City RTC Judge Himamaloan ruled the prosecution failed to substantiate their allegations of “syndicated estafa” against the Wongs. He granted bail for Derwin Wong.

Aggrieved by this decision, Valerie filed a fourth case of “syndicated estafa” with the Cebu court. This time, the Supreme Court stepped in and transferred the case to the Makati RTC where it is now being heard.

The earlier arrest warrant issued by the Cebu court, however, appeared to have made its way to Interpol. Davidson Wong was reported arrested in Madrid, Spain on the basis of that warrant.

This court drama is not about to end. It appears there is enough bitterness invested in this family feud to cause it to drag on for a while.