Is deregulation still an option?

Published by rudy Date posted on April 27, 2009

Few of his legislative peers can match his guts and dynamism in fulfilling his duties and delivering results.  He is also in a class of his own in being articulate, accessible and visible to the public. For these sterling qualities, Senator Richard Gordon is widely regarded as an exceptional public servant. But these past several months, he has found himself at the receiving end of intrigues and smear campaign. Undeniably, his detractors are at work to destroy his character and credibility.

The attacks against Gordon started when he assumed the role of chief Senate graft-buster and chairman of the powerful Senate Blue Ribbon committee and when he declared his intention to run for president in the 2010 elections.

There was this complaint filed against Gordon with the ethics committee by former Quezon City Rep. Dante Liban for alleged breach of the constitutional ban against dual posts in government. Liban wants Gordon expelled from the Senate for occupying the chairmanship of the Philippine National Red Cross. The complainant claims that the PNRC is also a government agency; therefore, there is clear violation of this basic rule.  But according to some civil service authorities, the PNRC is classified as a semi-government agency since it is partly funded from public funds.

Gordon believes that this complaint is politically motivated and Liban is being used by powerful forces to pursue a sinister agenda. Aside from this, the former congressman has an axe to grind against the senator.  Liban was expelled in 2006 as chairman of the PNRC-Quezon City chapter and was charged with estafa and robbery for failure to account for P10 million in Red Cross funds. Although the complaint was filed last February, it has hardly moved from square one.  But if the case is not progressing, it’s partly Liban’s fault.

While Liban brought the complaint to the Senate, he had also filed a petition involving the same issue before the Supreme Court. The Senate ethics committee, upon the advice of its legal counsel, opted to wait for the high court’s resolution of the case before acting on it.

Another complaint against Gordon is his alleged failure to settle a huge amount of expenses incurred during his seven-year  stint as administrator and chairman  of the Subic Bay Metropolitan Authority which supervises the Subic Bay Freeport and special economic zone. The Commission on Audit,  in an audit observation memorandum dated Feb. 16, 2005, stated that a review of the SBMA receivable accounts as of Dec. 31, 2004 revealed that CoA disallowances and charges amounting to P856,300,735, have become final and executory. Up to 99 percent or P854,677,167 of this total amount pertains to the period (1992-1998) when Gordon was the SBMA head.

According to CoA, should Gordon and other accountable officials fail to settle the amount, the CoA auditors concerned should have issued appropriate orders directing the cashier, treasurer, disbursing officer of state agencies concerned to withhold the payment of any money—salaries, allowances etc. and apply the same as payment for the obligations of the persons concerned.  Of the disallowed expenditures, P387.6 million pertains to alleged personnel services of volunteers incurred in 1994 to 1996.  If the CoA disapproved of this particular expense, it was because the volunteers were supposedly not aware that their names were listed in the payroll.

We are puzzled why this matter has resurfaced because we thought this had been resolved long ago.  We recalled that Gordon contested the CoA findings and the alleged fund misappropriation even reached the Office of the Ombudsman.  We can only hope that this problem can be sorted out by the parties concerned.


Since the Oil Deregulation Law took effect in 1998, the government was stripped of the authority to fix pump prices of gasoline, diesel, kerosene and other petroleum products.  Prices of fuel are now fully determined by oil companies based on prevailing prices of the commodity and other market conditions.  But as part of the deregulation of the industry, independent oil distributors and retailers have sprouted all over the country.  This has brought about a semblance of competition which has somehow benefited consumers as the oil firms—whether big or small—resort to strategies, including reduction of prices, to attract customers.

The problem is when retail prices keep on spiraling and there is suspicion of overpricing and profiteering, the energy authorities are always blamed.  In fact, the Department of Energy and its head, Secretary Angelo Reyes, have become the favorite punching bags of legislators, jeepney drivers, transport operators and consumer groups whenever they try to find a scapegoat for the “unreasonable” oil prices.

But what can our energy officials, and even President Gloria Macapagal Arroyo, do to arrest price increases especially when the prices shoot up in the international market? Aren’t these critics pouncing on the wrong targets?   Should not the legislators blame themselves for enacting the deregulation law and for failing to make good on their repeated threat to repeal the unpopular law?

The DoE is helpless to prevent the rise in the pump prices of oil because its regulatory powers have been clipped. The only way for the department to have a direct say in the pricing of petroleum products in the local market is for the downstream oil industry to be regulated again.

Instead of just mouthing angry rhetoric against the deregulation law, our senators and congressmen, particularly those eyeing the presidency or some other office in the 2010 elections, should start taking concrete action. Otherwise, they run the risk of losing their credibility.  Are these outspoken critics ready to cross swords with the oil giants? This is doubtful since they have chosen to hit someone—the Energy  czar—to serve as the target of their verbal assault.

Indeed, the task of the Energy Department has been severely limited to monitoring local oil prices, primarily to ensure that oil companies do not engage in predatory or cartelized pricing. Predatory pricing is selling one’s product below cost to kill competition while cartelized pricing is when oil firms secretly agree to peg down prices with huge margins knowing that they have a captive market.

Socio-Economic Planning Secretary Ralph Recto, who had to be recycled as director general of the National Economic and Development Authority after losing his senatorial reelection bid in 2007, has also made a lot of noise in the media by regaling the public with his claim that gasoline is presently overpriced by P8 per liter, while diesel should not sell more than P32 per liter.  Like his former colleagues in the Senate, Recto obviously wants to gain the patronage of the public by blasting at the DoE, even if this has the effect of undermining the administration which has given his flamed-out political star a chance to shine. On the other hand, Reyes says he will not be drawn into the game plan of politicians seeking media mileage at his and the administration’s expense. –Fel Maragay, Manila Standard Today

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