Owner: Meralco breakup won’t reduce power rates

MANILA, Philippines - Breaking down the ownership of the power distribution giant, Manila Electric Company (Meralco), will not result in lower power rates, a power firm owner said. Oscar Lopez, president of the First Philippine Holdings Corp., the parent company of Meralco, issued this statement as attacks against Meralco ownership continues to heighten. He also admitted that the issue against Meralco has affected its share price, which closed at P70 Wednesday as compared to P71 per share last Friday. Among the issues hounding the power company is the reported takeover of the Government Service Insurance System (GSIS) on Meralco. "But as long as it (Meralco) works well, it can survive. It has survived all these years. It has survived the Martial Law, and it will survive again despite all the attacks against it," Lopez said. But Lopez said the discussions on the possibility of breaking down the ownership of Meralco like what happened to the Metropolitan Waterworks and Sewerage System (MWSS) is "an interesting prospect." "That could be also discussed. But that requires a lot of legal discussion on how to do it and that depends on what happens on the shareholdings meeting," Lopez told reporters. He, however, stressed that for the rates to go down, the government should remove the royalties on natural gas as well as the expanded value-added tax (e-VAT) saying "particularly in making power plants that use local fuel more competitive vis-à-vis old plants that come up most expensive today because of e-VAT and the royalties." "If government is serious in lowering the rates of electricity distributed by Meralco, it will have to look at removing both e-VAT it imposes and the significantly large royalty it charges on Malampaya gas used by our independent power producers. We are one of the only countries that impose a huge tax on indigenous natural gas that is used by its own," he declared. Moreover, Lopez said the government can revoke its franchise as "they can do anything but all we can say is there are laws and will fight by the law." Asked whether he felt the Lopez Group is under duress, Lopez said it has not happened yet. "It's not martial law yet but it could (happen). I think we just have to wait for future developments," he said. During the RP-Europe Economic Business Conference last week, Lopez said he is willing to sell their share in Meralco, which stand at 33.4 percent. But he pointed out that the ways things are happening in the National Power Corporation (Napocor) “I have doubts government can do a better job". - Sun.Star