LAST week, we were visited at The Manila Times offices by BSP Governor Amando Tetangco Jr., who spent two hours regaling us with his insights and outlook on government fiscal management, the banking system, and the wider economy in general.
We have been fortunate to host a number of government officials, diplomats, and business leaders for friendly roundtable discussions like the one with Tetangco, but his visit was a bit more meaningful than most.
For one thing, he represents one of the few legitimately good decisions made by President BS Aquino 3rd, who in a rare moment of coherent thought reappointed Tetangco for a second six-year term back in 2011. Most people are probably not aware of it, but Tetangco is possibly the most experienced central banker in the entire world at this point; not only is he the first in the Philippines to serve two terms, by the time he steps down in July 2017, he will have been with the BSP for 43 years.
That kind of record makes for a deep well of knowledge, and once one gets past the placid, unflappable exterior—all high-level bankers have this, they wear it like a spacesuit—the sheer number of topics and amount of information one can learn is impressive, and maybe even a little intimidating. My notes from the discussion, which are limited to just the things I think are particularly interesting or important, include the official GDP forecast, inflation targeting, interest rate corridors, leverage and liquidity coverage ratios in the banking system, market contagion, global economic growth (or lack thereof), money supply and credit growth rates, banking system stress tests, derisking trends, banking security and management issues related to the BSP’s “know your customer” program, the outlook for foreign bank entry into the Philippine market, and the national retail payment system (NRPS) initiative.
All of these things affect everyone in fairly direct, demonstrable ways. Growth of money supply, for example, has a big impact on individual spending power and overall quality of life. Such growth determines whether one can afford to watch the antics of a vaguely pretty starlet and a Standard Model male celebrity on cable, or has to settle for the free broadcast.
The problem, which is not actually unique to the Philippines, is that the details of the operating condition of the economy are complicated and boring, whereas a girl whose main talent is apparently being able to open her mouth really wide publicly mooning over a pretty boy in elf shoes and a suit that’s a size too small is not. The state of the world today – anemic growth, persistent inequality and unemployment, and growing unrest and displacement – in large measure can be attributed to a general lack of interest in the economy. Understanding this, particularly in a country that has pretensions of democracy, is incredibly frustrating, because the state of the economy is really the only empirical evidence of the effectiveness of government. If people are dissatisfied with that, they only have themselves to blame.
Of course, that places a certain onus on those of us who make it our business to provide information; if the public is shallow and easily distracted, that should be a matter of choice, and not the unavailability of knowledge.
Over the next few weeks, my little corner of the media world will be focused on issues raised during Gov. Tetangco’s visit, because those issues matter – not only to our everyday lives, but as a basis for making some kind of judgment about the prospects for the country after the current administration hits the bricks. I realize it will be tough to compete with lip-syncing maids, dancing girls, and the generally insane asshattery of the aspirants to national office, but I’ll try to make it as fun and interesting as I can.
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But before I get to all that, I need to take a few moments to urge the Energy Regulatory Commission (ERC) to check the latest sly attempt by Meralco to undermine efforts to create a more cost- and service-competitive electricity market. In a letter to ERC chairman Jose Salazar, the Philippine Chamber of Commerce and Industry (PCCI) asked the regulator to reject petitions calling for rule changes that would allow distribution utilities to take on so-called “contestable accounts”—generally large-scale customers like factories or other businesses that use upward of 1 MW of electricity per month—outside their franchise areas.
The benefits to this kind of arrangement, particularly to would-be investors who are currently put off by the Philippines’ high power costs, is that customers can “shop around” for better rates or better service; if they want a piece of the action, the distribution utilities will have to become more competitive, which will lower commercial power costs and improve overall reliability.
Of course, when we say “distribution utilities” in the Philippines, what we really mean is “Meralco,” whose stranglehold on the electricity market and the regulatory body is so complete that the company has adopted the attitude that it can dictate policy. Although the PCCI wrote the letter to the ERC, the complaint in it has Meralco written all over it: Actual competition rules will destabilize distribution and development projections, and drive up power costs.
Translated, that means Meralco is keenly concerned that the instant the rules are in force, many of its big customers will defect its lousy, overpriced service for better deals elsewhere. Raising the specter of higher power costs is little more than a thinly-veiled threat to make retail consumers bear the burden of making up for Meralco’s inevitable lost revenue.
Shame on the PCCI for allowing themselves to be shills for the Philippines’ Worst Company Ever. Hopefully, the new ERC chairman will be a little more inclined to see through their nonsense than his predecessor.