Metro Manila (CNN Philippines, November 13)—Three lawmakers want to review and split into three the franchise of power distributor Meralco, saying that its “sheer bigness” is leading to “poor service and alleged abuses.”
Laguna Rep. Dan Fernandez made the proposal last Nov. 7 in a privilege speech, which was supported by Laguna Rep. Ann Matibag and ACT Teacher Rep. France Castro.
Matibag said President Ferdinand Marcos Jr.’s goal for the Philippine economy to be \”back in business\” faces a “stumbling block” because the country could not effectively attract foreign investors due to the high cost of power.
\”We can either divide Meralco, as what Congressman Fernandez proposed, or Meralco must give up entirely its interest in the supply of electricity,\” Matibag said.
\”We are all aware that our country has very high electricity rates and in fact, one of the highest electricity rates not only in Asia but in the whole world,\” she said.
“Meralco is a monopsony in the Philippine electricity market, being the biggest distribution utility in the country (and) having electricity demand that is more than half the demand of the entire country.\”
Monopsony is a market structure in which a single buyer substantially controls the market. Matibag said Meralco could have used this setup to reduce power rates.
\”From ₱3 per kilowatt hour in 2000, we now have ₱12 per kilowatt hour. Why have our power rates increased instead of reduced?\” she said, saying that for this year, electricity prices have surged instead of being reduced to a cheaper \”competitive level.\”
READ: Meralco hikes November rates
She said that this is due to Meralco not using its market power as a monopsony to reduce power rates. It instead chose \”to profit as a supplier of electricity.\”
Fernandez earlier said that Meralco controls 70% of Luzon’s electricity output. He said this means it can \”manipulate the operations of power producers and sellers\” and the economic growth of the country.
