PHILIPPINE DAILY INQUIRER, a respected and influential national daily newspaper, on it Global Nation / Overseas Foreign Worker (OFW) Spotlight section, honors a successful Sapianon Engineer. Inquirer has featured Rey Javale Oleo from Agtatacay Norte, Sapian, Capiz. Sapian Online congratulates Rey and wishes him more power and success. We are very proud to have Rey with us in SOL and we hope younger generations emulate his perseverance and quest for excellence. Please read the full of the feature story on Rey at http://globalnation.inq7.net/ofwspotlight/ofwspotlight/view_article.php?article_id=2095

Petropolitik, Sapian and China - Twelfth in a Continuing Series

The increased gas demand in Sapian may partly be attributed on the increased number of vehicles of more affluent Sapianons, and partly because of the improved quality of roads.

In the past, our national highway had been in a terribly despicable state. Most Youngblood contributors may not have recollection of what an ordeal it used to be just going to Roxas City. Public utility jeeps (PUJs) have been very few and I could still recite most of them from memory, namely, those of Nong Turing “Comos” Baldesimo, the Dennis series of former Vice Mayor Nita Baldesimo, a few from Dapdapan, i.e., the Monica of Nong Willy Martinez and that of the Bonaleses, and later, of Nong Loret Flores, driven by Nong Meo, and Nong Dodoy Teddy Vista, and Nong Culasing in Maninang. Aklan-bound, there was Kitahanon, and Nong Odong Vista’s Kamihanon. Later on, the family of Totit Obuyes acquired a few buses. Iloilo-bound, were R&K and later, Ceres would survive the grueling route. Nong Emoy Garcia and Nong Verino and Nang Rosit had the first tricycles to shuttle between Polacion and Crossing Talaba. In short, transportation was very, very scarce, and there was probably be one PUJ on every hour. You had to plan a trip to Roxas City. Leave as early in the morning as possible so you can return home just before dusk. Nobody would ever know what was the loading capacity then. Everyone was just too polite to move over on the middle bench until there is just enough room to breath and blink your eyes.  On the middle bench, you would tumble and turn. Your elbow may not move from Majanlud to Kilometer One. You had to disturb at least two other passengers whenever you straighten up a numbed leg. 

On rainy days, be prepared to take your shoes off. You’ll never know. In many instances, either its approach or the bridge itself is flushed away by flood water, or the road had suddenly melted into the surrounding rice paddies. Chances are, jeeps would either detour 40 miles, or stop dead then tell passengers to wade through flood and pump through mud to continue a journey on a waiting jeep. Summer months were as terrible with the clay that dried up into white, fine dust. You’ve had to wear a nose mask, cover your eyes and hair, and wear a jacket. Inside the jeep, air turbulence would cycle dust around. So you’re better off on the PUJ roof where air would blow dust away as soon as the jeep on the opposite lane had gone past, better than the hot, cramped, dusty “cabin” below.

For many of us, the best project for Sapian is to get road fixed. So, that was a priority research for me in Cory’s Malacanang. I found out then that help is on the way because the highway system, dubbed Panay Arterial Highway, was going full-speed ahead. The project had all the needed money from the US Agency for International Development (USAID). In fact, the Aklan-Antique and Antique-Iloilo phases have been mostly completed. The Kalibo Highway I: Passi-Lanot Road was nearing completion. The part for Sapian was dubbed, Panay Arterial Highway-Kalibo Highway Phase II, Lanot-Banga Road, had been bided out. I closely watched developments on this project and gave periodic status reports to my neighbors, Mely Baldesimo, Edwin Padasas and Giovanni Obuyes. I also gave copies of DPWH reports to the late Uncle Alber Gallardo, who was then the ABC President.

The problem was, the winning bidder, Turno America, had difficulty getting its equipment through Bureau of Customs. Turno claims that as an American contractor trying to implement a USAID project, it does not pay import taxes for its equipment. But former BIR Commissioner Liwayway Vinzons-Chato insisted that since the equipment are capital goods that are going to generate income in the Philippines, import taxes have to be paid. So, there was the long delay.

They did not resolve the Customs issue until Mt. Pinatubo erupted. A few days after the disaster, Malacanang scuttled all available unspent monies to pay for reconstruction, including that for Lanot-Banga Road. So, we’re again back to Zero!

During the time of FVR, and long after the demise of USAID funds, DPWH had been breaking grounds and inaugurating new roads and bridges around the country, left and right. These projects have been funded through the Medium-Term Public Investment Program (MTPIP). If we could only do the same for Lanot-Banga Road. So, it had become my conviction to guide former governors Borda of Capiz and Nang Nening, Governor Corazon Legaspi-Cabagnot of Aklan, to be on the same page. I advised them to raise the Lanot-Banga Road issue in all venues and forums, including all presidential visits to any province in Panay, League of Governors of the Philippines, or Cabinet Officers for Regional (CORD) meetings in Malacanang. And they did, Governor Cabagnot, particularly. Then we shepherded it from our end, including the Presidential Commitments and Directives Database that I maintained. As FVR fondly said, it had to be like a bibingka: fire on the top and fire at the bottom. But things stood still.

When FVR visited Capiz for a 3rd Army event during the term of Capiz Governor Esteban Contreras, concrete strides were made. Governor Cabagnot came to see me at Roxas Airpot. She wanted to speak at the dialogue, but she was not on the program. I added her amidst protests by Presidential Management Staff (PMS) Director Gina Jota. I took the heat, provided she mentions the Lanot-Banga Road problem. In our coordination meeting in the residence of Mrs. Judy Roxas in Baybay to thresh out issues to be raised to FVR, Lanot-Banga Road was added as one item. That meeting was attended by former Governor Contreras, Mayor (now Governor) Vicente Bermego, as President of Mayors League, and Congressman Mar Roxas. Two weeks later in dialogue with FVR, with former Congressman Roxas as moderator, both governors raised the same road issue. In reality, the governors did not stand to gain any monetary reward for a DPWH-administered project. So, their efforts and time have been pure civil service. Soon after that visit, with bibingka fire working on top and bottom, Malacanang endorsed the project to Regional Development Committee (RDC) Chairman Hechanova as a priority project. It later came back to us in the Joint Cabinet/NEDA Board meeting as an update to MTPIP. My supervisor, Director Jess Albar, speaking to me about that Cabinet road item, “There’s your item, take it.” I gladly wrote into the Cabinet records the Cabinet approval of that project. As part of MTPIP, it would have a guaranteed budget appropriation on the next fiscal year. That next year, the project was again bided out and construction finally commenced. Dozens of subcontractors took part in the construction.

Youngbloods would not have to suffer the ordeal we went through. Anyway, I rode through partly completed highway in the late 90s, with dirt road stretches and base courses every few kilometers. It was not until January 2005 that I rode the full stretch of the proud Lanot-Banga Road.

Petropolitik, Sapian and China - Eleventh in a Continuing Series

Let’s talk about a commodity not related to gas prices, but suddenly related to it just because President Bush said that America is addicted to gas. Bush the Elder once said that catsup is a vegetable. So, what the heck. My story today is about addiction to tobacco. I’m reminded of this topic as I started reading Christopher Buckley’s book entitled, Thank You For Smoking. That book is a satirical comedy on the machinations of Big Tobacco’s chief spokesman, Nick Naylor, who spins on behalf of cigarettes while trying hard to remain as a role model for his son. It also detailed high-level lobby in US politics, an Iron Triangle of lobbyists, members of US Congress and officials Federal agencies, as tobacco lobby fought head-on against the health establishment.

On FVR’s first day in office, the Palace Household, an office that’s, well, exactly managing the Palace household, had been taken over by the new administration. At its helm was Ambassador Lolita Haney, FVR’s aunt. Her gunner was Mrs. Paynor, wife of incoming protocol officer, and later Ambassador of Palace Protocol, Marciano Paynor. That morning, we have been disappointedly surprised. Mrs. Paynor had told us point blank that no cigarette would ever be lit inside the palace. The smoke deteriorates national treasures by Amorsolo, Juan Luna and other great Filipino masters that were hanging all over the palace walls. She added that even camera flashes ruin them. That’s ironic because FVR is aptly known as Tabako. Later on, we would equally be disappointed that our favorite caterers, Jade Vine, Ria’s Cuisine and Makati Skyline, would, from that day forward, be replaced by an endless fare of tuna sandwich and, oh well, tuna sandwich. We would later regularly see Century Tuna delivery trucks. FVR had a problem with cholesterol and his carotid would later be operated on. After a few months serving the FVR Administration, I never ate another tuna sandwich for years, until I got tired of pink salmon and discovered white albacore.

We had a smoking club under the Cory Administration. Our president was Ruben D. Torres, former Secretary of Labor and later, Executive Secretary. The membership spanned through different levels of the hierarchy. At that time, there were lead crystal ash trays all over, and as long as it does not get into the eyes of non-smokers, you’re fine. Just sit in the corner and light up, the high velocity air flow and filtration system will take care of it. Our club shared cigarettes and lighters, exchanged palace news, and bartered favors.

But it had been different under FVR since the only ash trays inside the palace are the ones for FVR’s chewed up tobacco. We would now have to go out through very heavy bullet- proof French doors, you have to lean your weight forward, into the patio or a terrace. Getting in would be more cumbersome because some doors lock you out. You have to either hope somebody inside would look outside and beg you way in, or go back to the entrance and through guards and a maze of hallways and stairs to be back to where you started. But life went on.

Through two administrations, smoking time for VIPs and staff alike took its unspoken toll on many occasions. Sometimes, the convoy’s itinerary had to be planned to have a smoking whistle stop. Venues of programs, locations of stage, riders in a particular vehicle of the convoy, and VIP holding rooms are often influenced by staff and VIPs’ smoking habits. Central Bank’s Falcon jet had to wait in Mactan International Airport because we could not find a cigarette vendor. We had to get a smoking holding room in Sarabia Manor (Iloilo) for Mrs. Ramos who was stressed about the number of people who showed up in a supposedly very private lunch with her family in La Paz. Lai Torres explained to her, “You are the First Lady now, so they are all your relatives suddenly.”

The arrival of Estrada Administration did not change the FVR “no smoking” policy even if the incoming Administration itself had its smoking club. On the morning of Estrada Inauguration, as I parked my tora-tora alongside the gleaming rides of national elites, I saw Triple V and more than half a dozen aluminum-clad catering trucks! Goodbye to one century of Century Tuna. On that day of Estrada Inauguration, like I did for the Ramos Inauguration, I would be the conductor of the bus shuttling incoming Cabinet members from the landing area to Palace luncheon, to Quirino Granstand for the Inaugural Address, to a Grandstand mini-reception, and back to the Palace for the first Cabinet Meeting, and the Inaugural Ball. Upon arrival from the Presidential oath taking in Barasoain Church, Erap went straight to the Drawing Room to try the President’s Desk. Then lunch was served. As he was walking out from the President’s Office for lunch, a giant chandelier, wires shorted out and cut the chains, fell down, missing him and his wife by a few feet. We were outside the office door waiting to hail to the new chief when we heard a big thud. Thud! No one will ever know whether it was a premonition of what will be a failed presidency, or the revolting spirits of the presidents past, or both.

But lunch was super, all the king’s best caterers and finest china for the first day of the newest presidency. It was exclusive for 300 people composed of the Estrada Family, very close friends and political allies, and yes, acolytes like us. Mostly, they were familiar faces of the silver screen, business and politics.

After lunch, we congregated to our usual smoking time. New smoking faces have been directed to the only and the best smoking spot by by the Pasig River. Then there was this short, balding, dark man who did not look familiar; he stood next to me asking about palace life. He was generally nice but curt sometimes. He told me he is an incoming Undersecretary of Tourism. So I politely asked why I never saw him in company of the elites, or at least, the power circles of Tourism Department. He said that he is from Jamindan, Capiz but he lived in the States for decades; has two houses there, in fact. But Erap, a close friend, had asked him to come home and help. So, you are from Jamindan, I’m from Sapian. Yes, he said his Dad was a mayor, and yes, he knows some Orilloses and Hondrados. Well, the only person I know from Jamindan is the late Nong Boy Advincula, husband of Nang Venus. He said he knows the Advinculas but he is not in a hurry to go home as yet because he had lots of work waiting for him. I did not ask for his name, but at the Cabinet meeting that day, I surmised from the list that his name was Orestes Ricaforte. I never saw him again. Never heard anything until two years later. After the downfall of Erap, I saw on the news that his wife, Yolanda Ricaforte, was the auditor of Erap’s jueteng money. Deng! His work waiting for him was counting Erap’s money. Had I known then, I should have volunteered to work under him and would have already paid up all my debts to Gee Ann Ballie Tupaz and NN Alvarez!

Anyway, at the second Erap Cabinet Meeting, our smoking club continued to expand. A new member was Undersecretary Fely Villareal, known to Mambusaonons as “the Madre,” daughter of former Speaker Cornerlio Villareal, Sr., who even ran for mayor in Mambusao. At that time, she was GMA’s deputy in Department of Social Services and Development. We shared cigarettes and lights, and assigned someone as a look out in case GMA suddenly calls her. GMA kept Undersecretary Villareal very busy and she had to put out halfway-lit cigarettes. What a waste.

I hoped to see them both again at the next meetings. But Erap did not convene the Cabinet for many months. On that second meeting, he said that since he was the President, he would not use the scripts we prepared. Neither would the agenda be as long as FVR’s. Whoever had issues among Cabinet would have to resolve it themselves and he would sign anything. He just asked us to enjoy the Manila Hotel catered lunch, which of course, was a pleasant surprise for us to be free from tedious minutes and the scourge of Century Tuna. The third Erap meeting and the last Cabinet meeting I will ever attend will be a Manila Bay cruise aboard the newly refitted BRP “Ang Pangulo.”

Petropolitik, Sapian and China - Sixth in a Continuing Series

Another way to revisit the saga of Sapian, China and oil crisis is tracing the thread of Philippine petroleum deregulation. Fidel V. Ramos (FVR) pushed for the enactment of Republic Act 8180, the Downstream Oil Industry Deregulation Act of 1996, to promote a more competitive market and prices by allowing the entry of “small” oil players to the market monopolized by the so-called Big Three, namely, Pilipinas Shell Petroleum, Caltex Philippines Inc. and Petron Inc. This involves the removal of the government subsidy to oil prices, called the Oil Price Stabilization Fund, which provided a cushion to oil price increases. In 1999, a new oil deregulation law (RA 8479) was enacted to pave the way for the full deregulation of the oil industry.

During World War II, many countries heavily regulated industries and nationalized critical industries (e.g., petroleum, coal mines, steel mills etc.) to provide maximum support and efficient use of resources for war efforts. After the war, many countries continued or expanded controls on industries to rebuild their war-ravaged economies, and well into the 70s. By the 80s, U.K. Prime Minister Margaret Thatcher - plagued by paralyzing strikes, mismanagement, and bankruptcy - started to privatize government companies. In economic circles, it was called Thatcherism. In the U.S., President Ronald Reagan tried to relax government control on businesses, called Reaganomics. Both trends lean toward Keynesian economics. A very influential 20th Century economist, John Maynard Keynes theorized that government should use its power sparingly at the macro-economic level to regulate (e.g., interest rates, use of reserves etc.) but let the private sector and market forces try to equalize itself. http://en.wikipedia.org/wiki/Keynesian_economics

Along these lines U.S. President Bill Clinton, FVR and other leaders promoted a book by David Osborne and Ted Gaebler, entitled, Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector. The authors looked into model governments efficiently run like corporations, with performance-based budget, partnership with the private sector, and people empowerment themes. It called for leveling of the playing field, deregulation, decentralization, devolution, and liberalization, in all aspects of government, politics and the economy. From Washington, to Europe, to Tokyo, a chorus of international organizations told Cory and FVR to pursue these goals. Hence, it was institutionalized in FVR’s Philippines 2000. http://govinfo.library.unt.edu/npr/index.htm

Under this philosophy, started by Cory but staunchly implemented by FVR, the bureaucracy worked double time to deregulate, decentralize, and devolve powers of governance. Among the first tangible result of these is the Local Government Code
- to the perpetual chagrin of my mother and Nono Varon’s parents (it’s a relief they are all in the United States now!) - that included the devolution of the Department of Health’s Rural Health Units (RHUs) to local government units. There were persistent rumors that RHUs will be renationalized, but early on I asked former Health Secretary Juan Flavier (now, Senator) and he told me to tell my mother to change career because it’s not going to happen. In theory, local governments should have more control over their local affairs and would be able to prioritize their policies and fine-tune their programs according to local needs.

Another example is today’s proliferation of cell phones. PLDT monopoly was broken by giving away franchises to any company able to install 5,000 lines, can apply for telephone franchise anywhere in the Philippines. Many leapfrogged with infinite cell lines, so you now have a galaxy of cell service providers. This also was true with Cable TV providers and a host of other telecommunications sub-sectors. Philippine Airlines franchise monopoly was also broken. Now, passengers are no longer at the mercy of PAL. Anyone who has a plane, compliant with all BOT regulations, could apply for an air franchise anywhere in the Philippines. Then you have BOT (Build-Operate-Transfer, Build-Transfer-Operate, Build-Own-Operate etc.) alphabet schemes, which allowed building of dozens of giga-wattage power plants by Hopewell Holdings, Enron, etc. worth billions of dollars. The caveat, contracts for 50 years for guaranteed power purchase by the National Power Corporation. This wiped out the brown outs overnight, particularly when power grids throughout the country have been interconnected. Then, you have your Skyway, North Luzon Expressway, MRT and many others. Under the general theme, base lands, like the Fort Bonifacio area, have been opened to joint ventures with the private sector.

For a moment, the Philippines was referred to as one of the Tiger Cubs of Asia.

Petropolitik, Sapian and China - Tenth in a Continuing Series

FVR’s trip to visit a farmers’ cooperative in Silay, Negros was actually a side trip to a visit to Victorias Milling Company (VMC). VMC is a family enterprise started in 1951 by the super rich Luzuriaga clan in Victorias, Negros Occidental. Its over-diversification and the decreasing demand for cane sugar in the world market left it in financial trouble. So, FVR bailed out the sinking company with a PNB loan package. While there, he inaugurated additional canneries for VMC Spanish sardines and Spanish-style bangus that we enjoy today. Victorias deserve help. It is probably the most compassionate company that I will ever know. Don Claudio de Luzuriaga was said to be strict and arrogant haciendero. Of course, since the 50s, he had the first and only sugar refinery (white granulated sugar) in the Philippines until Benedicto built the Calinog-Lambunao refinery in the late 70s. But one night he had a dream of God castigating him. The next day, he built a Church of the Angry God as he remembered it in his dream. We visited the circular Catholic Church painted halfway around with a mural of a very angry Jesus Christ, pointing fingers, mouth cursing, eyes blazing with fire, on the background were lightning bolts and a trembling earth. The depiction of Christ would have been a sacrilege had he not own a refinery. More than that, he also built homes for all his workers, from accountants to tractor drivers; houses with middle-class amenities, marble floors, hardwood panels, running water; he established a hospital, and sent the kids to better schools in Bacolod, from prep to College. Some children and thrid generation descendants of drivers and servants are now doctors and engineers. And many of them continue to work for VMC.

Since it was a PNB bail-out, PNB Chairman of the Board, and Presidential Adviser Bitay Lacson (former Negros Occidental Governor) helped us coordinate the event. We see Governor Lacson every Tuesday in FVR’s Cabinet. Bitay is the elder cousin of Jules Ledesma III (Asunta), sugar baron of San Carlos City and owner of Negros Navigation (NN). He is also the boss of Iloilo’s Hechanovas - Ramon is the Chairman of Regional Development Council (RDC) and Tony is former NN president before he was appointed as DENR Undersecretary. We will talk about the Hechanovas in another post, particularly, on with regard to our improved road that was officially called, Panay Arterial Highway/Kalibo Highway Phase II: Crossing Lanot-Banga Road.

At the end of the program, and FVR has gone to golf with the Luzuriagas, we staff waited in the VMC Club House with West Visayas PNP and AFP commanders ready to load our VIPs back to Manila. Suddenly, I saw retired Colonel Romeo S.  Fernandez. I approached him and he remembered me. He said he was the Warden of prison in Iloilo. Colonel Fernandez was the Provincial Commander of Capiz for many years. I remembered that when we were in Grade VI-Rizal, under the late Auntie Pining (Mrs. Josefina) Baguio, we had flag raisings and retreats in front of municipal hall and Chief Jose “Peping” Honrado was the Chief of Police. He was still the Capiz PNP Commander until after I graduated in High School. When we were in first year high school, the late Mayor Ishmael B. Orillos organized an very important Purok Organization event held in Basketball Court. Nong Tiboy even had a lechon baka near the slide. I waited for slices of roast calf and watched the program. Colonel Fernandez was the guest of honor, and Chief Peping was introducing him, “Colonel Fernandez, I am happy to report to you that the Municipality of Sapian is the most peaceful town in the whole Province of Capiz!” Then there was a very loud BOOOoomMm! followed by a long silence. Toto Alfred Oleo, Ramon Montina and the late Peter Vista Bueno were in Toto Alfred’s house just on the next block from the program and they lighted a large firecracker. Chief Peping ordered his policemen to get the perpetrator, but before they could, Alfred’s Dad knew who it was and they really got into a big trouble that night.

Mr. Eddie Olmo deputized Nening Alex Olano to train our CAT Corps officers. The day before COCC started, Nang Marilou Oro received a message from Provincial Command for a youth training. I, together with the late Sammy Oro, was asked to go Loctogan to attend a Barangay Rural Improvement Corps (BRIC) seminar on livelihood project. Colonel Fernandez presided over the training. I asked him to give a short tape-recorded inspirational message to SNHS CAT Corps. He obliged and remembered me from thereon. The tape was played on our COCC. Many years later and long before our last meeting in Negros, we would see in few major events in Malacanang and once in Camp Crame. I reminded him of the interview in his jeep. In one instance, I delivered his letter to FVR, and in another I helped follow-up his retirement with General Ernesto Gidaya of Veterans Affairs

Petropolitik, Sapian and China - Ninth in a Continuing Series

Since it might prove hopeless for us to compete against China for limited petroleum supply, we should rather focus our energy to develop our agriculture. It was believed that we could not industrialize without modernizing our agriculture; now that we might never industrialize, it is the more reason to modernize our agriculture and small and medium enterprises (SMEs).

Projects in Negros and Bulacan deserve notice because they transcended limitations of land sizes. Size of lands has always been a perennial obstacle in economies-of-scale rice farming, especially since parcel sizes continue to be reduced as properties are passed down from generation to generation. In two barrios of Silay, Negros Occidental, farmers surveyed their properties, measured each parcel and valued them into commensurate share of ownership in a cooperative. Then, using their combined lands as collateral, they applied for multi-million Land Bank loan, bought tractors, seeders, and built post-harvest facilities. Then, they destroyed the pilapils, flattened their farmlands, installed irrigation system, and hired an agriculturist. They themselves have rotated turns in Board of Directors, as company officials, and as drivers and manual laborers. A similar project in Santa Maria, Bulacan, involves hundreds of farmers who established a self-sufficient, chicken production plant. They planted corn, manufactured feeds, raised chicken, produced eggs, processed meat, and hired sales and delivery staff to market their products. Their conveyor-based processing plant, which looks more like a Magnolia plant, was worth nearly P25 million. In Leyte, instead of selling copra, a cooperative built a coconut oil mill worth about P1.25 million. Because of profitability, they expanded to two more plants. Later, Japanese businessmen imported their coconut oil to be processed into special lubricant for high precision instruments. Now, they are reaping the benefits of their entrepreneurship.

FVR’s trip to Samar-Leyte was memorable. I was the point-person on the visit’s leg to Calbayog, Western Samar. So, I contacted the province, made all the arrangements and prepared the itinerary. On the morning of our ocular inspection, my alarm did not go off and woke up at 7:00 a.m., which was our take off time. I jumped up and sped to Villamor Air Base’s 205 Presidential Airlift Wing. When I arrived 45 minutes later, everyone, including Colonel Hermogenes Ebdane, then Deputy Commander of the Presidential Security Group (now DPWH Secretary), was already aboard the plane. People did not talk much to me until we arrived at Romualdez International Airport in Tacloban. Our aircraft stopped at the regional composite force helipads and we quickly boarded two waiting Hueys. After a brief warm up, we took off and I was relieved that my tardiness no longer matters. After about 15 minutes airborne through the coastline, the Huey in front turned back, then we followed. Soon we were back in Tacloban airport. The pilot of our Huey said that since we left too late that morning, return flight from Calbayog could be impossible because of thickened cloud cover that day. Now I had cold-chills again. Stranded after 10:00 a.m., everyone’s blaming me now. Colonel Ebdane was cool. That cool brought him to top. With no prior arrangement made on land transport, we boarded and transferred into a succession of government vehicles, practically from town to town.

We arrived in Calbayog by almost 3:00 p.m. The late Governor Jose Rono (former Deputy Prime Minister and Minister of Local Government under Marcos) patiently waited for us. Governor Rono was cool too. We ate (and cherished) a lunch that was ready since that morning and ready to spoil at that time. After an abbreviated meeting and a quick look into FVR’s venues we quickly headed back to Tacloban, non-stop this time. We arrived in Tacloban airport at around 8:30 p.m. and luckily, it is one of few domestic airports with fully operational night navigation system to support our type of aircraft. An Air Force officer joked that airport’s night instrumentation has been installed because Imelda usually flew home anytime she and Marcos had fights.   

That next day, our ocular trip was the worst in the history, I was ready to volunteer to swap with a co-worker for another visit. However, in an afternoon that next day, PSG operations staff called me that we were probably been saved by my tardiness. One of the two Huey choppers we briefly flew in exploded at sea. Everyone died, including General Orina, father of ABS-CBN anchorwoman Ces Orina-Drilon. If I remind Secretary Ebdane now, I may get a free meal in DPWH cafeteria.

Petropolitik, Sapian and China - Eighth in a Continuing Series

First, there were faults in the assumptions. Proponents say downstream deregulation will make the economy stronger and better because it will, as it should, be left upon a free market to operate. Market is said to be a self-equalizing force; that all things being equal, profit interests and buyer interest will synthesize into general welfare.  So the theory goes. But opponents argue that since there is no upstream industry to guarantee a free play of supply and prices for downstream industries, deregulation has no net positive effect because downstream entrepreneurs are still dependent on Big Three for supply. Hence, there is no real competition. Proponents believed that as soon as deregulation is announced, oil companies around the world would race to our doorsteps. But our announcements, repeated announcements, have been met by a stony silence. The reason, some say, is that giant oil companies, with their rules of engagement and protocol, would not go after each other’s throat because, as traditional economics always say, genuine competition lowers prices; and lowered mark-up prices reduces profitability. By and large, they share not only the same security and political concerns, but also the same oil wells, pipelines, refineries, transshipment facilities, tankers, borrow each others’ jets, etc. Early on, critics warned that if there would be no new players the size of the Big Three, deregulation is doomed to fail. And there were none.

Another result of deregulation is the removal of Oil Price Stabilization Fund (OPSF). OPSF is an import levy instituted by Marcos and was approximately P1.25/liter in 1997. It was placed on reserve as safety net to fend ill effects of escalating gas prices. When there was sudden jolt in gas prices to soften impact to consumers, government either totally covered (subsidized) the difference in cost, or spread costs over a period of time (credit). Even at the months before deregulation, OPSF mechanism had been working very hard to stabilize unpredictable gas prices. OPSF was typically used for Forward Cost Cover (FCC) that absorbed for consumers the fluctuating price difference three months in advance. Former Energy Secretary Francisco Viray would always complain to the Cabinet how hard it was for OPSF to keep up with increasing world prices. For over three years, I was the energy “expert” on FVR Cabinet minutes. My supervisor, Director Jess Albar from a prominent Roxas City family, knowing my interests, invariably gave me all Cabinet items on energy, until the Cabinet no longer talked any OPSF or FCC.

On top of deregulation, privatization was another scourge to Philippine petroleum industry. Petron, a government petroleum company, was sold to Aramco. At that point, government had fully abdicated its last measure of influence on domestic oil prices.  Ownership of Petron had been good oil price leverage; profitability had been shoved aside in favor of national welfare. Petron saturated market with lower priced gas to upset upward pressure on gas prices. So, losing Petron ownership and having no OPSF safety net, and none of expected downstream competition, government is now left with the last front-end control. To tax or not to tax.

If we are already selling tax-free oil, and China would pay even more money for even more gas supply, we would be in big trouble. How many of us would be willing to pay P90/liter even if it’s tax-free?