MANILA, Philippines—The foreign chambers of commerce in the country drew unanimous condemnation in the Senate Monday as "predators and carpetbaggers" for allegedly interfering in efforts to bring down local power rates.

"I think it is uncalled for for these people to be lecturing to us. Enough is enough for foreigners to be meddling in our affairs, meddling in the workings of government, meddling in our political lives, meddling in the discharge of the duties of the elected representatives of the people," Sen. Juan Ponce Enrile said.

Enrile's attack on the Senate floor against the chambers of commerce of the United States, Australia-New Zealand, Canada, Japan, Europe and Korea came a day after a joint letter they sent to President Gloria Macapagal-Arroyo on May 27 was widely publicized.

The letter of the group, called the Joint Foreign Chambers (JFC), urged Ms Arroyo to honor the contracts of independent power producers (IPPs) amid moves to amend the Electric Power Industry Reform Act (EPIRA) in an attempt to lower electricity rates.

The JFC said that tinkering with the contracts would be a major disincentive to investors planning to build additional power plants or to participate in the government's privatization program in the face of looming shortages.

Enrile, an administration stalwart, asked the Senate to summon all the presidents of foreign chambers in the country and ask them to explain why they did not want the EPIRA law amended, instead of writing to the President.

"I am for inviting investors to invest in the power circle but not the predators or the carpetbaggers. We are amending it to make it easier for them to come to that very open market where competitiveness comes into play and they can participate in the competition," he said.

Enrile also reminded the "foreign guests" that the legislators were serving the interests not of the big businessmen but the poor household users of electricity in the country.

Bipartisan support

Practically all the senators were unanimous in supporting Enrile's call to summon the JFC officials, agreeing that they had overstepped the limits by interfering in legislative prerogatives such as amending the EPIRA law.

Sen. Edgardo Angara said the chambers of commerce were actually lobbying for the status quo, which he averred was highly and extremely profitable for them.

He said the JFC allegation that the amendments would adversely affect the industry was "absolutely wrong" because Congress was precisely accelerating open access, or allowing other investors to come into the field.

"By open access, we are allowing competition, which under the present law will never happen," said Angara. "I think it's just appropriate that these chambers withdraw and apologize to the whole Congress."

JFC presidents to be called

Sen. Miriam Defensor-Santiago, chair of the Senate committee on energy and joint congressional power commission, said she would schedule a hearing this Friday and summon the JFC representatives.

"They are mere guests in our country. They are welcome guests, but they should not overstay their welcome. They can just make a recommendation, 'please do not touch the bill.' But certainly, no group of foreigners, even if they are investors, can tell the Philippine Congress to not touch that bill," Santiago said.

She said Congress was not changing the entire EPIRA law but only certain provisions.

The only problem with the IPPs was the take-or-pay provision which was very onerous to the Filipino taxpayer, she said.

"The foreigners can source their electricity from IPPs with take-or-pay provisions but it should not be a standard clause in our contracts of the government and the IPPs," she added.

Sen. Joker Arroyo said the JFC move had "boomeranged" and what took place Monday was a foretaste of what was bound to happen in the Senate hearing on power rates.

"All the senators appeared to be unanimously against the position of Foreign Chambers of Commerce. Initially, everyone has spoken against it. It's a bipartisan lament against the FCC," Arroyo said.

'Impertinence unacceptable'

Senate Minority Leader Aquilino Pimentel said that JFC's "impertinence" of seeking legislative remedies from Malacañang was unacceptable.

"We should not allow ourselves to be bamboozled by anyone, regardless of whether they are foreign chambers of commerce or not," Pimentel said.

Press Secretary Ignacio Bunye declined to be drawn to the controversy.

"What we're saying is we're calling your attention to the discussion that took place in the Senate. Maybe, that should give you an idea of how other leaders feel about the position paper submitted by the joint foreign chambers," Bunye said.

"There are meetings going on to assess what needs to be done for us to move forward. But the bottom line, the overall objective of government is to lower the cost of power," he said, adding that "the situation is under constant review."

Moves in the Senate and the House of Representatives to seek lower power rates followed revelations by Winston Garcia, president and general manager of the Government Service Insurance System (GSIS), that anomalous "sweetheart deals" between Manila Electric Co. (Meralco) and its IPPs were to blame for high power rates.

Garcia failed to wrest control of Meralco from the politically influential Lopez family during a stormy stockholders meeting last week whose outcome was now the subject of court litigation.

Critics said Garcia's move was a result of Ms Arroyo's efforts to muzzle the Lopez-owned ABS-CBN radio-television network that had taken a tough stand against corruption in government.

The IPPs were encouraged in the 1990s at a time when the country was experiencing an acute power shortage. Meralco serves 60 percent of the nation's electricity consumers.

Take-or-pay provision

Under the take-or-pay provision of the contract between Meralco and its three IPPs, authorized under EPIRA and approved by the Energy Regulatory Board (the precursor of the Energy Regulatory Commission), the distribution utility is authorized to pass on to consumers charges for electricity that it is obligated to buy from the IPPs, two which also are owned by the Lopezes, although unused.

The IPP contracts obligated Meralco to pay the power generators a minimum of around 80 percent of power the IPPs generate to make their operation viable. Consumer demand is variable, Meralco says, and electricity generated cannot be stored but constantly made available to consumers.

National Power Corp. (Napocor) has a similar "take-or-pay" contract with its own IPPs.

The JFC, along with Meralco, contends that removal of this provision would discourage investments in the power sector. Instead, Meralco wants government to remove the value-added tax (VAT) and royalty tax on natural gas that it uses to bring down power rates, second highest in Asia after Japan.

In mid-May, the Philippine Chamber of Commerce and Industry lashed out at Napocor and Meralco for asking regulators to allow them to pass on to consumers some P20 billion worth of "take-or-pay" electricity. With reports from Michael Lim Ubac, Ronnel W. Domingo and Eliza Victoria, Inquirer Research