Apologists for the Panay Electric Co. (PECO), whether paid hacks or whatever their purpose is, have resorted to one of the vilest, yet crudest, black propaganda tricks in a desperate effort to discredit Congress’s refusal to give the power company another 25-year franchise and authorized a new firm to replace it instead.
They tried to circulate on social media a fake letter dated December 4, allegedly written by House Speaker Gloria Macapagal-Arroyo that essentially “commanded” Rep. Franz Alvarez, chairman of the House committee on legislative franchises, to rush the granting of a franchise for electricity distribution in Iloilo City to another company, MORE Electric Power Corp.
The bogus letter even included a sentence saying President Rodrigo Duterte himself called Arroyo over his cellphone to rush the granting of the franchise.
The fake letter was so crudely done, and Arroyo’s signature was clearly forged. Arroyo’s office had quickly issued a denial that the Speaker ever wrote such a letter. It pointed out: “The Speaker does not sign such kinds of correspondence as the task is delegated to her Deputy Secretary General. The official letterhead of the Speaker is nowhere close to the letterheads used in the fake documents.”
The circulation of the fake letter was intended to create the false impression that it was Duterte himself, in connivance with Arroyo, who wanted MORE to take over the electricity-distribution monopoly in Iloilo City.
This is patently a lie. The bills in Congress seeking to grant the franchise to MORE, controlled by ports-management billionaire Enrique Razon, Jr. , were filed and supported by most of its members both in the Senate and the House early this year, months before Arroyo even assumed the speakership.
No member of Congress had championed PECO’s application for a renewal of the franchise, including Senator Franklin Drilon himself, who was known to be close to the Cacho clan, the firm’s biggest stockholder, and Senator Grace Poe, who is considered as being from Iloilo and whose family has been vehemently anti-Arroyo.
Sources from the Arroyo camp claimed that the letter was traced to have been first circulated as a Facebook post by a notorious PR man, who had been one of the propagandists of Mar Roxas when he ran for the presidency in 2016. The hack also wrote about the “letter” in his column in an obscure tabloid. If PECO had recruited him to be its propagandist, it made a big mistake. The propagandist has such a minuscule Facebook following and an even smaller readership in his column.
A source claimed that it was the same clumsy PR man who wrote PECO’s full-page ads published in the Philippine Daily Inquirer and the Philippine Star in November, which among other false claims, alleged that it was Duterte himself who was supporting PECO against MORE, which was “stealing the business” of electricity distribution.
End of franchise
The end of PECO’s franchise is significant. That would have been impossible if a Yellow President had won in 2016, since its owners had been known to be close to the Mar Roxas clan for decades. It had been running the electric distribution business in Iloilo City for 95 years.
Thirty percent of PECO’s shares are held by the Eugenio Lopez clan, the most powerful oligarch in the country since the strongman Marcos fell in 1986. The Lopezes, through First Philippine Holdings, acquired these shares in 1996, a few years after the Yellow-controlled Congress gave PECO a 25-year franchise, when its 1968 authority expired. The 25-year period is ending this year — when the Yellow Cult is no longer in power.
PECO has been a cash cow for the Lopezes, with revenues from it estimated at nearly P1 billion from 1996 to 2017. But its revenues from PECO have not been just in the form of dividends. After the Lopezes got 30 percent of PECO’s shares in 1996, the clan, through its Panay Power Corp., built a new 72-megawatt plant that supplied most of the company’s power retailed to Iloilo residents.
The Lopezes sold the firm called Panay Electric Development Corp. in 2003, when it was critically pressed for cash, for P2.3 billion. The buyer was Mirant Philippines, a joint venture between Japanese firms Marubeni Corp., Tokyo Electric Power Company Holdings and Metrobank.
In 2016, the Indonesian-controlled conglomerate, First Pacific, bought it from Mirant and has been PECO’s biggest supplier of electricity. PECO’s critics claim this has been one major reason for the high retail electricity prices in Iloilo City as the distributor paid P7.7 per kilowatt hour for it, while, according to the firm itself, the power it bought in 2018 from the Wholesale Electricity Spot Market cost it only P2 per kilowatt hour.
The monopoly obviously has been very profitable to the Cacho family as its sole source of revenue. Yet the firm’s current president, Luis Miguel Camacho, is a member of that very elite group of Filipinos listed in the International Consortium of Investigative Journalists’ (ICIJ) database of massive leaked information from law firms that handled the setting up, or maintenance, of offshore accounts.
He is identified there as an “intermediary” in an offshore company in the British Virgin islands named Costa Group Investments Ltd. That it wasn’t a case of mistaken identity is proven by the fact that the ICIJ reported Costa Group’s or Camacho’s address as “3rd Floor, Manfred’s Building General Luna St. Iloilo City, Philippines 5000.” That’s the address of PECO’s principal office.
The new firm MORE’s takeover of the power distribution business in Iloilo, which the old-elite Cacho clan had owned for nearly a century, could send shock-waves not just to the electricity business in the provinces in industries controlled by monopolies for decades. It will send the message: The present dispensation will no longer tolerate inefficient monopolies.