All these talk about Meralco and the high cost of electricity has made me wonder what the average Filipino household’s power bill looks like.
To make the comparison fair, why don’t we divide our electricity bill with the number of persons living in the house, including babies. I think the little darlings consume a bigger amount of electricity compared with the average person (need for airconditioning etc.)
For April, I paid P805.88 per person.
How does that compare with yours?
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Meralco shares went into a nosedive today after news of a possible investigation (good luck with making it look like a friendly Q&A) by Congress into how Meralco runs the show. If there’s anyone in the audience who doesn’t know that this is politically driven, raise your hand.
No hands?
If this entire hullabaloo actually brings down my electricity bill, goodie. But here’s a So What Chocnut snippet that people should not miss.
Exactly 20% of that electricity bill goes to Meralco. If you look at your bill, you will see the biggest portion is called generation charge, which goes to the independent power producers and the National Power Corp.
Yes, that means the government.
That simply means the power to bring down electricity rates is in the government’s hands. And that should make you wonder what the administration is trying to do. This early, the business community is already worried. Of course they are not buying the we-want-to-drive-down-electricity-costs-for-poor-Filipinos line. Former central bank governor and AIG’s standard bearer Joey Cuisia has already been interviewed on television saying, “After Meralco, who next?” Not good for business confidence.
May 19th, 2008 at 2:22 pm
Tama ka ACN. That’s why I believe Mr. Garcia is a good investor. He knows how to make money in his investments. But it doesn’t mean he can lower the power rate or manage Meralco better. Mr. Garcia’s style is like the corporate raider Carl Icahn who can make money even as he ran the company to bankruptcy. That’s what Icahn did to TWA after he took over.
May 17th, 2008 at 5:37 pm
isn’t garcia the one who opposed the Henry Sy to buy epicb @ 40s per share? because of him, it was bought around 90s per share..
pa correct kung mali
May 16th, 2008 at 3:58 pm
I have no doubt Mr. Garcia is a good investor but I doubt his track record as a corporate manager. Just ask GSIS employees and pensioners. He wants to subdivide Meralco’s franchise area to lower power rates. That might even increase operating cost because it’s reverse economies of scale. It’s a contradiction to his other argument that Meralco should have the lowest rate because it has the biggest franchise area and thus enjoy economies of scale.
But Mr. Garcia’s proposal can very well serve the interest of his principals who all want to get a piece of Meralco’s business.
May 16th, 2008 at 3:03 pm
Corporate raider, hostile takeover or not, it is about time Meralco gets rattled. They have been in this business for so long we are entitled to know what shenanigans they have been doing to profit of our sorry a**es.
Whatever happens the end result should be a lower rate for the legal users.
May 15th, 2008 at 5:25 pm
Right now, the intention of GSIS to be a corporate raider is not yet visible. The share of GSIS, admittedly, is less than that of the Lopezes and if Meralco has employees stock ownership plans, it will be more difficult for the GSIS to take over the management of Meralco.
Usually in a hostile takeover, the “target” company is not saddled with charges of possible wrongdoings but that is not the case with Meralco which is being accused of several irregularities and Winston Garcia may utilize this to initiate a “bear hug”.
The Lopezes are experts in corporate business. They can fight off a hostile takeover anytime provided their noses are clean.
Also, not all takeovers are bad. A very recent example is Bank of America’s acquisition of Countrywide Financial, in the process Bank of America also acquired debts totaling 100 billion dollars but it expects to make profit when the U.S. housing market crisis is over.