Since the Privatization, the Electricity Price in Philippines Has Increased 55%

The summary of Bro. Josua Mata (the General Secretary of SENTRO) in the zoom meeting with SP PLN Group on August 23, 2021

“Our friends in Indonesia should fight for the privatization. Don’t make it happened like in Philippines, because the worse will happened should the electricity being privatized.”  

In this occasion, I want to share the experience for tenth of years the fight against privatization in the electricity sector in Philippines. 

I come from the union in the electricity sector. Where my current position is as the general secretary of SENTRO in Philippines. And what we’ve been doing is part of the energy democracy.

What is energy democracy? We believe that all people need sustainable energy. This can happened if public control the energy resources. Should the electricity is in the hand of private, the transmission won’t happened.

The energy democracy emphasized that workers should have real voices related to how the energy being revived and utilized. Start from production and transmission, in this is the sale. We are also believe that energy should be acknowledge as public property and basic rights. These are the things that can be found in the document of union declaration for energy democracy.

We also believe that energy democracy can replace a liberalized energy market through democratic planning and ensuring public funding. Besides, that’s also opening a potency for a renewable energy, so then the energy is not produced merely for profit.

Then the last part is to detach people’s ignorance in handling their energy problems. In this matter, the people should have power to use or manage the electricity.

We also believe that energy democracy is imperative. Especially now, when IPCC published their most updated studies on the greater need to transform the a renewable energy and no carbon.

Probably we all have heard that IPCC (Intergovernmental Panel on Climate Change) stated that human activity causing climate change. In relation to that, the biggest sector releasing carbon is energy sector. There’s high urgency from the energy system, currently rely on fossil fuel to shift to a more renewable energy.

In the document of TUED (Trade Unions for Energy Democracy) also explained that we need the transition as fast as possible. But there won’t be any transition, without our push for the transition. What really happened right now, the use of fossil fuel is getting higher. Though the use of the renewable energy is also increased, like the use of wind and solar. However, the total global production supply for the renewable energy is still so low. 

The biggest obstacle is that this kind of energy perceived as commodity. This is the consequences when electricity controlled by the private entity.

PSI (Public Services International) has showed over and over that energy should be under public control. For that, my friends in Indonesia should fight the privatization. Don’t let what happened in Philippines also happened here, as we are all know that only the worse happened when energy being privatized.

My reflection on what happened in Philippines, first, I have to say that in the last 20 years since the law in electricity energy industrial reform, the condition is getting worse. Then, they said that should the market operating well so there will be competition and thus it will result in efficiency. Therefore we shall have an efficient electricity, safe, and reliable, also the price will be cheap. That’s the promise from 20 years ago.

What’s happened now? Instead of competition, soon after the law passed in 2001, we shifted from monopoly into oligopoly. It means only several player able to participate and dominate the system. In several cases, there’s collusion in it. I won’t mention who they are, but in Philippines they called Tycoon. The biggest businessman in the energy sector, where they are the one pushing the privatization in the energy sector.

We can find in Philippines, where after the law opening up a privatization room being legalized, all businessmen playing in the electricity industry guaranteed to get profit since all risks will be bear by the consumers instead of themselves. That’s also the reasons, though we have gone through with electricity problem, they can get away from all problems we encounter. They still get a lot of profit.

Secondly, we can see how they create their own market. In all over the country, the private control over electricity is getting bigger. Instead of getting a big amount of energy supply, what really happened is an energy crisis.

In Philippines, there are often a take turn power outage. During the dry season, how hot it is without an AC and fan. Sometimes the power outage happened for days, even ever happened for three days. The take turn power outage happens periodically, continuously.

From this we can say that private sector is never been able providing reliable electricity. Otherwise, when the state controlling the energy industry, of course the state responsible in planning the capacity of its power plant. We assume that the state will carried out their job well.

But privatization shares the energy to the private sector. When in the hand of private sector, the state doesn’t have any power whatsoever to intervene the power plant and designing how much the capacity of its power plant to be able to fulfil the need. The private entity, even able to postpone the investment, postpone the repair of the power plant.

They can plan and design crisis. Why so? Because they prioritize business over serving the people. They have responsibility to create profit.

In the transmission lane, there’s assumption that we can’t compete by build our own transmission lane as it’ll be very expensive. So, even the transmission line is also being privatized, done by partner company from China. The impact is that now there’s security problem. They are realized that the system used is Chinese technology, including the software. Even  if we have  the IT person who can easily use the code, but they can’t speak Chinese. When now we have problem with China on the South China Sea, this is becoming an issue. I am afraid that they will have a full control on the transmission lane, and they can use it to weaken us. This clearly will jeopardize national sovereignty.

Another problem is that currently the electricity price is so expensive. The electricity price is 5,56 per KWH in 2001. Now, on July 2021 becoming 8,9071 per KWH. The increase is 55%.

Philippines becoming one, among some, country with the most expensive electricity price In the world. Sometimes we pay second highest in Asia, sometimes the fifth. But in the world we sometimes becoming among the ten countries with the most expensive electricity price.

Learning from the experience in Philippines, I pushed our friends to stop electricity privatization in Indonesia. Because, in the end all risks will be bear by us.

The Reflection in Doing the Fight

At that time, we are a progressive workers alliance. We worked with a wide range of coalition, called FDC. This is a big alliance during that time.

In the labour movement, we feel that we are not strong enough to fight. That is why we need to work together with all element. Since not only workers who will get impact, but all people.

Then we need to use all existing potential to fight. Meeting the executive, legislative, enven to the court. Including going to the street to conduct demonstration. We do whatever possible to convey our messages, that we reject privatization. In this matter, we work closely with the medias. 

In the end we failed, but we keep fighting. For 10 years we can postpone the privatization, since we use all fighting front possible to be used.

In the end we are defeated. At that time, the economy grows in many countries. So the state catch the chance. So the state bow down to one ideology stating that we need market. That is why then market dictatorship happened, bow down to the neoliberal mantra.

Other thing makes us being defeated is the fact that many people think that state enterprises in electricity sector is so unreliable. There’s corruption and inefficient.

That is true. The state enterprise is unreliable and corrupt. But the existence of the worse state enterprise can’t justify to conduct privatization. If the state enterprise is bad, then what we need is a better new management, not being privatized.

In the 90s, we tried to catch our economy lag. At that time, there was an unexpected population growth. The growth of the middle class created a bigger need for the energy. Since those people can afford to buy AC and other electricity appliances. It caused a crisis. The crisis in energy is a simple excuse to be used to bow down to the neoliberal policy, then pushing to use an instant solution, which is bow down to the market. 

Morevoer, the NPC (National Power Corporation) has a massive debt, eat away the state budget. Then it’s conveyed that the reason for privatization is to stop the massive debt. But what happened when the privatization implemented, some of those massive debt were becoming consumers burden.  Who paid the debt? Of course the taxpayer. All of us.

In 2001, when the congress passed the law that open up privatization room, we exposed that all congress members has been paid by those who plan to privatized the electricity industry. 

The information was being exposed by one of congress member who against the privatization. He’s shock when he found a big amount of money in his office, half of million pesos. Then he realized, all congress members rejecting the law was given half of million pesos. But the one who agreed on that getting bigger amount than that. We finally publicize  that and becoming a big scandal. But the privatization still happened.

The problem is that we were not able to mobilize a massive public opinion. So we can’t put a bigger pressure for this issue.

Moreover, the people can’t get the electricity they need. In the end, the people are fed up with the system. So they concluded by saying “ok, that’s it. Let’s privatized. 

After 20021, the fight shifting. One thing we’ve been doing since 2001 is defending the electricity cooperative in the country. Where, there are 120 electricity cooperatives owned by the persons paid the electricity. In many cases, we organize electricity cooperative, besides build the union. We build a transparent management. We also organize the consumers as ally to fight for the privatization.

We also push the transition to the renewable energy and build our advocacy to the just climate. Other thing we need to do is raise awareness to the people and this should be done if we want to fight privatization. This can’t be done without the involvement of all impacted civil society. While keep giving the understanding, we also should fight for affordable and reliable energy. If we fail to do this, then it’s easy for the public to be persuaded by the neoliberal.

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