As regular readers of this column over the years may have gathered, I am not particularly a fan of the Philippines’ Energy Regulatory Commission (ERC), but the threat made by President Rodrigo Duterte on Monday to officials of the commission – resign, or face state-sanctioned persecution – was completely unacceptable. It is bad policy, bad management, embarrassingly immature, and in no way advances efforts to define and solve the pertinent issues.
Duterte’s latest rant was provoked by the suicide about two weeks ago of ERC Director Francisco Villa Jr., who explained in his suicide note that he was being pressured by ERC Chairman Jose Vicente Salazar to bypass regular processes to approve favored procurement contracts. Besides Villa’s statement, Duterte said he has intelligence reports detailing systemic corruption within the agency. If the ERC commissioners—Alfredo Non, Ina Asirit, and Gloria Yap-Taruc, along with Chairman Salazar—do not resign, Duterte said, he will either file cases against them for corruption, or he will ask Congress to defund or disband the agency.
If we make the assumption that what Villa disclosed is in fact true —which is truly an assumption, because contrary to the president’s and what seems to be the prevailing public attitude, the sad fact that the man killed himself is not confirmatory evidence of the accusation—the problem Duterte is addressing is an administrative problem, and does not in any way deal with the larger issues of dysfunctional utility regulation. Indeed, process flaws, whether due to intentional corruption or incompetence, must be addressed and corrected.
But the way Duterte should handle that, if he sincerely wishes to “change” the way government does business, is to prepare the evidence he says he has and file the appropriate cases against the appropriate officials. Simply threatening someone to force them out will only replace the people; it does nothing to solve the alleged corruption, or establish a reliable system of accountability.
The biggest disappointment about Rodrigo Duterte is that, despite the folksy appeal of his grumpy curmudgeon act, he has revealed himself to be as conventional as any other Filipino politician: Completely personality-oriented and having the misguided belief that his popularity confers on him some sort of divinity, and with no interest is doing the quiet work of implementing systemic change or sustainable solutions that might last beyond his relatively short time in office.
It is fortunate that cooler heads, particularly Senate Energy Committee Chairman Sherwin Gatchalian and Senator Ralph Recto, have called for a more sober approach to looking into the problems of the ERC, which needs to be investigated on two levels. First is the immediate problem of bad administration within the agency as alleged by the late Director Villa. That should, however, be a fairly straightforward inquiry: Did Chairman Salazar or any other official of the ERC violate laws in managing the commission? If so, hand the matter over to the Ombudsman to handle according to established laws and procedures.
The second problem is the larger issue of whether or not the ERC is doing its job of regulating the energy sector effectively. The ERC has been hounded for years by accusations of “regulatory capture”—favoring certain industry interests in setting rules or approving rates, capital expenditure programs, or power supply terms – and this is something that needs to be investigated in detail once and for all, and changes made if found to be true. Those solutions probably go far beyond simply replacing the present Commission with people Duterte likes better, and may involve amending the Epira law and completely remaking the regulatory framework.
In fact, that is precisely what most business and consumer advocacy interests would like to see happen, which is why Duterte’s threat is distressing. It is no different than other threats he issued against people in other contexts (for example, Senator Leila De Lima in connection with the drug trade, or businessman Roberto Ongpin in connection with online gambling): It may be effective in simply purging people who may or may not legitimately deserve it, but bypasses persistent and ultimately much more damaging problems. In a country that has suffered for years from a mostly deserved reputation for irregularity and inconsistency, it is precisely the wrong approach, no matter how entertaining and novel it may seem.