MANILA, Philippines--(UPDATE) Three business groups on Friday expressed support for efforts to bring down power rates, but distanced themselves from talk of the government's possible takeover of Manila Electric Co.

In separate interviews, officials of the Makati Business Club (MBC), Philippine Chamber of Commerce and Industry (PCCI), and Federation of Philippine Industries (FPI) said they would not be involved in the issue of whether management control of the Philippines' biggest power distributor should remain with the Lopez family or be taken over by the government.

But they said they resented having to pay for Meralco's systems losses, which, by law, were being allowed to be passed on to consumers.

Also on Friday, Oscar Lopez, the patriarch of the Lopez family, said he was standing by what he had earlier said--that the government could buy out the Lopezes if it wanted to.

"I have said what I wanted to say [on Thursday]," Lopez, chair of the First Philippine Holdings Corp., said in a statement. "If government thinks they can do a better job in Meralco, they can go ahead and buy us out. But looking at how Napocor (National Power Corp.) has and is still being mismanaged, I have my doubts government can do a better job. I am not interested in meeting with [Government Service Insurance System chair Winston] Garcia at this point because there is nothing more to talk about. I refuse to be drawn into Mr. Garcia's publicity game."

Lopez added: "As I said, I am sick and tired of being used as a convenient ploy to divert attention from other pressing problems of government. I stand by what I said."

Ready and willing


Garcia, who had accused the Lopezes of mismanaging Meralco, said Friday the GSIS had sent word that the state-owned pension fund could immediately raise the money to buy them out.

"I have already relayed to them that we are willing to discuss the terms with them, if they are serious," he said on the phone.

Garcia said the GSIS, on its own or as part of a consortium, could easily raise the necessary funds for the buyout.

He said his immediate goal would be to boost shareholder value while lowering power charges to benefit consumers.

Garcia said he was not interested in managing Meralco. He said that if ever the GSIS ended up buying out the Lopezes, it would hire professional managers to run the power utility.

Sergio Apostol, President Gloria Macapagal-Arroyo's chief legal counsel, said Malacañang would not get involved in what he described as an "inter-corporate matter" between Meralco and the GSIS.

"The President said we will not get involved in this," Apostol told reporters. He said Ms Arroyo made this clear at a meeting with officials early this week.

Apostol, who only days ago said he favored a government takeover of Meralco, said the government was intent on keeping to its privatization policy.

"It will run counter [to the policy] if the administration tries to intervene and buy the shares," he said, adding: "It's Winston Garcia's call."

The Lopez group and the government own 33.4 percent and 33 percent, respectively, of Meralco. The GSIS alone accounts for about 23 percent and is represented in Meralco's board of directors.

Not the solution


MBC executive director Alberto Lim said his group would back efforts to bring down power costs but government control of Meralco was not the solution.

"Taking management control is a step back from the privatization program of the Electric Power Industry Reform Act," Lim said. "Who else would shoulder the costs of that but us taxpayers?"

He added that while lowering Meralco's power rates might be in the hands of its management, there was no penalty for inefficiency of operations or systems losses.

As for the issues raised against Meralco by Garcia, MBC's Lim said this concerned transparency and was a corporate issue.

"Garcia should not be making actions that bring down the price of Meralco shares," Lim said. "That is contrary to his interest as a shareholder, and it only shows that what he is doing is politics-laden. We won't fall for the call to support that."

PCCI chair emeritus Donald Dee said his group appreciated the need for government involvement in utilities, but not through management control.

"We agree on the oversight of Meralco's management through its board. Government has to be involved in and be influential in how Meralco manages its investments," Dee said.

He agreed with Lim about systems losses, which he said should not be passed on to consumers.

FPI president Jesus Arranza also said his group would not be involved in the issue of management control of Meralco.

"But we are concerned with Meralco's systems losses. The systems loss charge should not be levied with the value-added tax because it is not something we enjoyed or became productive with," Arranza said.

Mere ploy


Senate Minority Leader Aquilino Pimentel Jr. said the purported government threat to take over Meralco was a mere ploy to stop the Lopez family's ABS-CBN Broadcasting Corp. from being critical of the Arroyo administration.

"President Macapagal-Arroyo and her advisers know that it would be folly to push for a state takeover of Meralco because of the dismal record of government in managing business enterprises and the stigma of corruption hanging over the administration, and because it will be totally inconsistent with its much-ballyhooed privatization policy in the power sector," Pimentel said, adding:

"We do not want the government taking over Meralco. But I'm sure that is not the intention of [Ms Arroyo]. She merely wants to silence the ABS-CBN and other media facilities owned by the Lopezes so they can be used for the propaganda of the administration."

Senate President Manny Villar wants the planned Senate inquiry into Meralco's high rates to also include the state-run Napocor, specifically its purchase of overpriced coal.

"This will ensure that we will have an overall view of the entire power industry," he said in an interview with "Dos por Dos" on dzMM radio.

Villar also said the government should go slow in the takeover plan envisioned by GSIS' Garcia.

"The government cannot run a corporation. We have yet to see it run a corporation efficiently and profitably. We should be careful in any takeover," Villar said.

Sen. Miriam Defensor-Santiago, chair of the Joint Congressional Power Commission that will hold a hearing on Monday, had said she would focus on why Meralco was charging high rates when it was buying power at low rates mostly from its power generation firms.

Transparency


Garcia said Meralco should be more transparent in its pricing mechanisms and observe a "Chinese wall" in dealings with affiliated companies.

But Lopez said: "Meralco has been as transparent as the law requires us to be. If there is anything wrong at all, it is the fact that Meralco is even overregulated..."