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There is more that meets the eye in the epic fight between the
government and the Lopezes over Meralco.
No president in history has won in his struggle
with the powerful Lopez clan which by the way celebrates this year
its 80 years of being in business starting with the late Eugenio
Lopez Sr.
The Lopezes are among this country’s
quintessential entrepreneurs. They started the country’s first
airline, the country’s first taxi fleet, and the country’s first
tri-media conglomerate. Iñing Lopez acquired Meralco in 1962 from
the Americans and ran it like a political and economic fiefdom until
1972.
The Lopezes also have the habit of meddling into
politics. The meddling was capped by Fernando Lopez successfully
running as the vice president of Ferdinand Marcos in 1965 during
which the popular lawyer from Ilocandia handily defeated the poor
boy from Lubao, incumbent President Diosdado Macapagal, Gloria
Macapagal Arroyo’s father. Marcos and Lopez repeated their victory
in 1969, a presidential election which at that time was considered
the most expensive and lopsided in favor of the winner. So
tremendous was the electoral expenditure that by February 1970, the
peso had to be devalued, from P3.95 to P6.45 per dollar.
Meralco has always been the Lopez family crown
jewel. Despite family patriarch Oscar Lopez’s offer to sell the
electricity distribution monopoly, I do not think the Lopezes will
give up Meralco that easily. The family literally invested blood,
sweat and tears in the company.
Marcos grabbed Meralco for P10, 000 during
martial law in exchange for the release of Lopez scion, Eugenio
“Geny” Lopez Jr., who was arrested for allegedly plotting to
kill the president. Geny managed to “escape” from detention from
the army camp Fort Bonifacio in circumstances that will put to shame
Superman and Iron Man. Presidential brother-in-law Kokoy Romualdez
took over Meralco. Marcos, however, did Meralco a big favor. In
1978, he transferred all its aging generating assets to the
state-owned National Power Corp. This saved Meralco a lot of money
in debt servicing and in regular capital expenditure.
When Cory Aquino returned Meralco to the Lopezes
in 1986, almost without cost, it was a very different Meralco—leaner,
hugely more profitable, and meaner. It sells electricity to one of
every four Filipinos in an area covering 9,337 sq. kms with 25
cities and 86 towns. Cory also returned ABS-CBN to Geny but it was
mostly the shell of its old size. Geny Lopez used Meralco’s
economic clout and ABS-CBN’s influence to rebuild the Lopez
conglomerate, borrowing $2 billion and diversifying into areas like
telephone, water, property, cable TV, tollways and power generation.
The first two failed, but the other four took off mightily. Today,
the Lopezes derive most of their profits—and wealth—from power
generation and tollways, thanks to the government’s generosity
and, yes, the Lopezes’ entrepreneurial savvy. The Lopezes are
remarkable as entrepreneurs for their sense of public service. They
think they are in business primarily to serve the public or its
interest.
I have talked to industrialist Raul Concepcion
who monitors electricity prices. He says Meralco has been as
transparent as can be in its rates and costs. Also, insiders say
Meralco accounts for only 13 percent of total electricity costs. It
has not had an increase in its distribution charge since 2003.
Besides, the Supreme Court doesn’t seem to like Meralco, an
offshoot perhaps of ABS-CBN coverage of the aborted impeachment of
Chief Justice Hilario Davide.
The battle promises to be messy. The Lopez
family owns the ABS-CBN Broadcasting Co., the largest network in
assets. ABS-CBN is one reason why we know of such scandals like
Garci and ZTE and why senators backed by the network end up
electoral topnotchers. It is also one reason why Mrs. Arroyo has
become the most unpopular and vilified president in history.
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