Can big business involved in cartels or monopolies Be trusted in providing the best prices to consumers?
In the case of developed Asian countries like Japan and South Korea, big companies like Toyota, Nissan, Samsung and Hyundai helped lead the industrialization of their countries and currently offer products and services at competitive prices worldwide.
But the same cannot be said of the Philippines in so far as its power industry is concerned, because the country has one of the highest electricity rates in the world, which is actually hobbling efforts to industrialize.
And as the Manila Electric Co. (Meralco) comes under fire over its plans to impose horrendous electricity price hikes, legislators must prioritize passing an anti-trust law that will help check the greed of big business.
Meralco’s raking in record profits (which it proudly discloses to the Philippine Stock Exchange as a requirement) from 2009, from a backdrop of the Philippines having among the highest electricity rates in the world, is actually ironic.
So super profitable is Meralco’s operations that industrialist John Gokongwei bought the 27-percent stake of San Miguel Corp. and its units in the utility for a cool P72 billion.
Gokongwei’s entry into Meralco, however, doesn’t change the picture that the country’s oligarchs are still in firm control of the Philippine power industry. The Lopezes, who once were significant shareholder in Meralco, are now actively involved in the power industry along with the Aboitizes, while Henry Sy controls the wholesale channel for power through the National Grid Corporation of the Philippines.
The controlling shareholder in Meralco, Beacon Electric Asset Holdings, is represented by Manuel Pangilinan, who also represents major shareholders in telecommunication firms Philippine Long Distance Telephone Co. and Smart Communications Inc., and water concessionaire Maynilad Water Services Inc.
Had Congress enacted an anti-trust law or measure years or decades back, the situation today where the power industry is dominated by a few players that cannot offer the best deals for consumers could have been avoided.
Congress can actually learn from the experience of the United States, where there are anti-trust measures.
In the United States, the Sherman Anti-Trust Act of 1890 is still regarded as the cornerstone for all anti-trust laws in that country. One of the most prominent features of the Sherman Anti-Trust Act are its provisions prohibiting monopolies, attempts to monopolize, or conspiracies to monopolize.
In economics, a monopoly actually refers to a group of parties or entities that deny the consuming public a competitive or lower price for a product or service. In the Philippines, it is obvious that Meralco and its power suppliers are guilty on that count, since as stated earlier, the country has one of the highest power rates in the world and the utility even has the gall to impose a horrendous hike despite the high poverty and unemployment rates.
The worst thing that can happen to the country in the face of the Meralco power rate fiasco is the utility will get away with murder, or will get the nod of the inutile Energy Regulatory Commission and Supreme Court to hike its power rates eventually.
If that happens, what will stop Meralco from investing its mega-profits into ventures related to power generation, and solidify its control over the power industry with its cohorts?
Meralco, backed by Pangilinan’s investors, and Aboitizes and Lopezes, can just go about their usual business in the next few years and expand their hold on the Philippine power sector if there is no anti-trust measure enacted within the short term.
If that happens, the Philippines can never be expected to industrialize and create quality jobs, and poverty and unemployment will become a perennial problem despite the consistent gross domestic product growths the country will register in the next years.