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Aquino says he has no power to stop power rate hike

By: - Day Desk Chief / @umichaelNQ
/ 06:30 PM December 14, 2013

Philippine President Benigno Aquino III, left, speaks as Japanese Prime Minister Shinzo Abe listens during the joint press conference at Abe’s official residence in Tokyo, Friday, Dec. 13, 2013. AP

TOKYO – Giving the public respite from oil and power rate increases is not within the power of President Aquino to grant at this point.

In a chat over coffee with Filipino journalists covering his trip to Tokyo, the President said his hands were tied by a Supreme Court ruling barring the use of the Malampaya Funds for subsidies to power consumers.

“There is Supreme Court ruling that emphasized that Malampaya Funds [are solely] for development of energy, and the distribution of energy might run afoul of that definition by the Supreme Court,” he said. “Now, I’m still having the lawyers look if it is at all possible to use Malampaya for the purpose of re-establishing all of these distribution lines. But so far, the initial advice… is that the latest Supreme Court definition does not allow it.”


The fund cannot be used to repair power lines and transmission towers toppled by Supertyphoon Yolanda in the Visayas, he said.

As a last resort, Aquino he could use part of the President’s Social Fund for the restoration of power in Yolanda-stricken areas although he did not thnik there was enough left to cover the entire cost of restoring 250 transmission towers.

The government initially estimated the cost of repairs to reach P1 billion.

On suspending power rate increase, which took effect this month, Mr. Aquino pointed out that Energy Regulatory Commission, which approves power rate increases, was an independent body.

“ERC does not report to us, they are independent of us,” said Aquino.

The President said, however, he had some “doubts” about the reasons given for the power rate increase.

“But we want to make sure that the basis for it was correct. And right now there are doubts as to whether it was correct. It (maintenance work  power plants) shouldn’t have happened in that manner—without  alternative power sources,” he said.

The President has ordered the Department of Energy to check if certain power plant operators had colluded with one another to bring about an artificial shortage of electricity and thus hike its price.


The DOE is looking into this possible collusion among power plants that suspiciously shut down almost simultaneously last month, resulting in Meralco buying more expensive supply from the spot market.

He also noted that “spot prices” in the Wholesale Electricity Spot Market were “the highest they have ever been.”

“And you have to ask, ‘why did that happen?’ And the question has been asked even before I asked Secretary Petilla [to investigate],”  the President added.

Aquino welcomed any move in Congress to pass a law that would allow the Malampaya Fund to be appropriated for repair of damaged power lines.

Related Stories:

Aquino urged to use gas fund to subsidize power rate hike

Meralco hikes rates by up to P3 per kWh

Malampaya fund audit explosive, says COA

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TAGS: Benigno Aquino III, ERC, Malampaya funds, MERALCO, Politics, power rate hike
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