Will Duterte admin stand up to Manny Pangilinan?

Is businessman Manuel V. Pangilinan gearing up for a head-on collision with the newly installed administration of President Rody Duterte?

This is the talk going around business circles and coffee shops in the aftermath of the businessman’s much-publicized statement that “the government must get out of the way.”

Pangilinan surely knew that such statement would create major tremors. Pangilinan is a major player in the local and regional business sector. His words are never taken for granted, even by politicians.

Pangilinan’s remark was reportedly triggered by his irritation over the position of a couple of government agencies that his deal with the Ayala Group’s Globe for the purchase of San Miguel’s Vega Telecom, Inc. has to be extensively reviewed before it can be approved.

Was Pangilinan sending strong signals to the Duterte administration that he is in the mood for a major head-on collision?

Prior to that “government-must-get-out-of-the-way” statement, President Duterte issued a warning to both PLDT and Globe that he would open up the market to foreign telecommunication companies if the two do not improve their internet services.

Is Duterte likewise sending a strong message to Pangilinan?

It will be recalled that the new Chief Executive had also said on several occasions that he does not look kindly at the mining industry – a sector where Pangilinan is heavily invested.

Following those statements, the President named anti-mining activist Gina Lopez as the new secretary of the Department of Environment and Natural Resources. Not only are Lopez and Pangilinan on the opposite end of the ideological spectrum when it comes to mining – both had openly engaged in a bitter word war, with Pangilinan reportedly calling Lopez a “liar” at a forum of business leaders.

If Pangilinan is set to wage an open war against the Duterte administration, it looks like that head-on collision would not be confined to the telecommunication and mining sectors.

During the campaign leading up to the May presidential polls, the President had declared that he would address consumers’ complaints about the high cost of electricity in the country.

Consistent with that call, the Energy Regulatory Commission (ERC) appears to have stepped up the implementation of the provisions of the Electric Power Industry Reform Act (Epira) that were designed to bring the power sector out of the clutches of a monopolistic system into an era of competition.

We recall that the framers of the Epira had envisioned a time when customers would get to choose from whom they want to buy their electricity. Given the power of choice, customers would naturally go for cheaper options. Distribution companies, such as the Pangilinan group-controlled Manila Electric Company (Meralco) will, therefore, have to come up with rates that can compete with other options available in the market.

That is a logical way to bring down the cost of electricity that President Duterte wants and had promised.
To get there, the ERC has to implement the provisions of the Epira called the “Retail Competition and Open Access” (RCOA).

Pangilinan’s corps of lawyers, in a bold move, had gone to court to have the implementation of that provision stopped. As expected, Pangilinan’s battery of lawyers got what they wanted: a lower court slapped a temporary restraining order (TRO) against the RCOA.

This looks like a declaration of war, not just against the ERC, but against the Duterte administration.
The way we understand it, the RCOA will change the present situation where customers do not have the choice as to who would supply their power requirements. Their only source are the utilities; they are dependent on utilities, like Meralco, which has a monopoly of the business in specific geographical areas.

In that kind of a situation, customers are aptly called “captive customers.”

What the framers of the Epira had envisioned was for more of these “captive customers” to eventually become part of what they call “constestable market” where all retail suppliers can compete based on price and performance.

Is it a situation like this where Pangilinan wants the government to get out of the way?
The problem is that if the government gets out of the way, customers might forever remain part of Pangilinan’s captive market.

Pangilinan is known to be feisty and frank. Would his trademark feistiness, the size of his business empire and his financial largesse be enough to make the President capitulate?

Let’s wait and see. This will be interesting.