In November 2002, the Supreme Court ordered Meralco to return billions of pesos to its customers stemming from an overcharge of 16.7 centavos that the electricity distribution company collected since February 1994. The initial pronouncement of the distribution company was to quote a much lower figure than the accumulated excess collections. Members of Agham quickly turned to simple arithmetic to compute the amount to be returned and announced that for the period of 1994 to 2002, a total of over P29 billion was to be returned to Meralco consumers.

The issue of electricity rates and power supply in the country had been staple issues that Agham engaged in ever since its founding assembly ten years ago. From doing simple calculations to talking about the privatization of the power industry, we try to simplify these seemingly technical issues to something that the ordinary worker can appreciate—so that they can act accordingly for their own benefit. These are just some examples of how engineers and scientists can contribute to directly address the issues of the day concerning public utilities. Other ways would be to implement projects to provide alternative sources for power and the like.

What are public utilities? These are services and infrastructure that are used by everyone to facilitate their daily activities and economic production. As such, these utilities should be made accessible and affordable to the public since limiting access to these services would make, in general, daily activities more difficult for the people.

Power, water and fuel utilities provide ways for electricity, water and fuel to reach households and industry. The role of a public utility is to generate or acquire these resources, have a means to deliver and distribute them to the public. For example, a transportation utility provides the infrastructure and means that enable people to move goods and themselves from one place to another. A mass transportation system provides point-to-point mobility for people in an affordable and timely manner. Road networks, land, air and sea transport, and traffic control form part of this transformation system.

Since public utilities facilitate economic production and daily activities, it is desirable that the state provides these infrastructure and support services in addition to other basic social services like health and education. Usually, the state would exact taxes on its citizens so that it can perform the function described above. The adage (often abused) that the roads we use are “your taxes working for you” is the ideal case.

Privatization, liberalization and deregulation started since President Ferdinand Marcos and were continued to conform to the structural adjustment program with the International Monetary Fund-World Bank under President Corazon Aquino. President Fidel Ramos later signed a Letter of Intent to the IMF, which included the reduction of government subsidies to public services. This eventually led to the sale of these utilities.

Joining the General Agreement on Tariffs and Trade-World Trade Organization in 1995 opened up our utilities to the full entry of foreign capital. This trend continued on with the succeeding regimes, which pushed for various specific laws such as the Electric Power Industry Reform Act (EPIRA), the MWSS privatization, the 1995 Water Crisis Act, Downstream Oil Deregulation Act, Air Liberalization Law and the 1995 Public Telecommunications Act.

The legacy of the privatization of water and power utilities was the ever increasing rates for these services. Effective electricity rates rose from just above five pesos in 2001 to over eight pesos today. Directly, this is an example how privatization and liberalization make public utilities more inaccessible to consumers. Rate increases in electricity, water, toll and fuel rates fail to make affordable vital public utilities.

More privatization and liberalization under the proposed charter change would not change this. These changes in the Constitution would only serve to further open up remaining utilities to foreign investments and grant monopoly control to foreigners over strategic sectors of the economy.

These would include proposed charter revisions to allow 100 percent foreign ownership and control of public utilities. Proposed guarantees against expropriation, full remittance of foreign exchange in terms of earnings, profits, and dividends on investments, employment of aliens, protection of patent, repatriation of capital and ownership of buildings and land offered to investors do not bode well to local investors and industries. More tax exemptions and preferential treatment to these investors mean that the government loses money just to attract foreign investments. In addition, allowing pass-on provisions on losses and loans of these utilities adds additional burden for the consumers.

A government that is serious in developing our economy and truly wants to ensure the welfare of its people should strive to provide the necessary infrastructure and services that will facilitate our production activities. If it fails to nationalize these utilities, rates will just continue to rise and strategic control would be left in the hands of foreign interests in the long run.