Power and Federalism PDF Print E-mail
Friday, 10 August 2018 12:14



Manila — because of the consistent financial losses that is leading to its imminent demise, the Zamboanga City Electric Cooperative, Inc. (Zamcelco) was provided by the National Electrification Administration (NEA) eight remedies of relief to save the coop from total financial collapse. One of the remedies was the contractualization of an Investment and Management Contract (IMC) that, if activated — hopefully by early September — will infuse fresh capital into Zamcelco and will make available managerial and technical expertise to SAVE a dying power utility.

Such an intervention will help Zamcelco regain financial, technical and operational balance within a reasonable period of time from the effective date of the contract — the principle goal of which is to ensure QUALITY, RELIABLE, REASONABLE and AFFORDABLE power supply for Zamboanga city.

Today at the Power Summit initiated by Mr. Celso L. Lobregat, the congressman-gentleman from the first district will try to dissect the importance of the IMC, point out the critical condition of Zamcelco and elucidate on the contract between a private investor and Zamcelco whereby the former will infuse capital to cover the payment of and provisions for certain obligations of Zamcelco, and manage and operate the coop for a performance-based fee.

The IMC will guarantee that our independent highly-urbanized federal city won’t have abrupt, long blackouts because of technical and operational changes and rehabilitation to the system. We are in agreement that there is an immediate need to overhaul Zamcelco’s financial, administrative and operational systems. Worn out power lines, rotting poles and overloaded transformers should be replaced to reduce part of the coop’s tremendous system’s loss, now hitting close to 25 percent.

With the power issue about to be resolved, Zamboanga politicians are now scoring for issues as they start firming up their campaign strategies for launching in October for next year’s mid-term elections. You see, the Bangsamoro Organic Act is no longer a political issue since its signing into law last Monday. I surmise the attention will now focus on Zamboanga’s looming power crisis. Thus, today’s Power Summit.

Mr. Lobregat, Mr. Mannix Dalipe and Her Majesty the Mayor have trained their guns on the power issue. And after that’s solved with the entry of an IMC, the next burning issue will be Federalism. I’m just curious to know the respective positions of the trio.

I have always maintained that the much touted federal system of government could be oppressive to the middle class and the poor. It will bring about financial catastrophe to the ordinary workers who would be made to pay higher taxes to help sustain and maintain a bureaucracy made up of 18 federated regions.

As the bureaucracy would be reorganized, this will require federal and regional independent governments to impose taxes on almost everything or resort to massive borrowings to run the federal regions. Even Finance Secretary Carlos Dominguez III, admitted that the country’s credit ratings may be “downgraded” if El Presidente’s administration “continues to press for the change on the form of government...due to uncertain economic and political outcomes.”

The National Economic and Development Authority (NEDA) also warned that the shift could cost the administration additional expenses amounting to as much as P131-billion in the first year of transition. NEDA Secretary Ernesto Persia said during a Senate budget hearing on the proposed P3.757-trillion 2019 budget that the amount only constitutes the direct cost of running a federal type of government in the first year of its transition and “does not yet consider the indirect costs, such as possible disruption in the projects and the economy.”

Mr. Dominguez, in the same hearing, expressed concern over the draft federal constitution, saying “it fails to address some financial concerns.” He meant, I reckon, taxation. On the point of fiscal concern, there is nothing to gain on Federalism.