Speech at the 10th Annual General Assembly Meeting of Philippine Federation of Electric Cooperatives (PHILFECO)

8 May 2015

I extend my sincerest congratulations to the entire Philippine Federation of Electric Cooperatives (PhilFeCo) family on the occasion of its 10th Annual General Assembly Meeting.

Thank you very much for having invited me to join you here in your gathering today. In your letter of invitation, however, I noticed that you have indicated that I was the Vice-Chairperson of the Senate Committee on Energy. Well, I’m sorry to disappoint, but I’m not the Vice-Chairperson of the Committee on Energy, as I am just a member of that Committee. Rather, I’m the Vice-Chairperson of the Senate Committee on Cooperatives.

There seems to be confusion as to whom to invite: sa Committee on Energy ba o Committee on Cooperatives? Tulad ba ito ng nangyari sa ating mga electric cooperatives na dati rin ay naguluhan: “Saan nga ba talaga tayo? Under the CDA ba talaga tayo o under the NEA?! Ano ba talaga, Kuya?!” More on this point later.

Anyway, with that clarification, I hope you don’t unceremoniously send me packing back to Manila. Sayang naman ang pinamasahe ko at ang pagkakataong makadalaw rito sa napakagandang bayan ng Panglao, Bohol.

But, whether you like it or not, I will nonetheless avail of my opportunity here. Although right now, I feel like someone who has failed to comply with the so-called “fit and proper rule” for directors of electric cooperatives! More on this point also later!

Kidding aside, as the Vice-Chairperson of the Senate Committee on Cooperatives, I have important points to raise that might interest you and that I hope will be worth your while.

It’s quite hard to begin my address to you today, considering the rather very biblical and Christian connotation and tone of the theme for this year’s general assembly of an unquestionably secular group of electric cooperatives. Mamaya, ikuwento ninyo na lang sa akin kung ano ang eksaktong tinutukoy ninyo sa inyong tema para sa aking kaalaman!

Anyway, I’ll still attempt to pursue your chosen theme to the best of my ability, discretion, and faith.

To start off, I don’t know if you noticed, but yesterday marked the 2nd anniversary of the enactment of Republic Act No. 10531. This law aimed to strengthen the National Electrification Administration (NEA) as a way to improve our nationwide rural electrification program, including its implementing arms on the ground: our electric cooperatives.
This law is Congress’ attempt to clarify and settle, once and for all, the enduring—and sometimes acrimonious—debate about the jurisdiction over the regulation and supervision of our electric cooperatives. As confirmed by Congress, it is beyond doubt that the NEA now has supervisory and disciplinary powers over electric cooperatives, regardless of their primary registration or franchise, that is, whether from the Cooperative Development Authority (CDA) or the Securities and Exchange Commission (SEC).

The rationale behind this is that being participants in the nationwide network or system of providing electric supply to the public—a most vital and essential public service—electric cooperatives are among the species of “special cooperatives”, which need to be under the watch of a specialized body that shall supervise their management and operations. Regardless of the difference in their primary registration as business organizations, electric cooperatives are all within the ambit of authority of NEA solely by their being “electric distribution utilities”.

Kaya ngayon, wala nang debate ukol sa kung “Pro-CDA” o “Pro-NEA” ba dapat ang mga electric cooperatives. Lahat ay nasa ilalim na ng pagbabantay ng NEA. However, two (2) years into the implementation of the RA 10531, electric cooperatives perhaps might still be warming up to this new idea, especially considering that just a few years ago—in 2009—our New Cooperative Code had expressly declared that submission under NEA’s authority was but an OPTION, and not a mandate.

Subalit ngayon, malinaw na. May kapangyarihan ang NEA sa lahat ng mga electric cooperatives, saan man ang mga ito naka-rehistro. And it is likewise crystal-clear that government is serious in the reforms that it wants to institute, as can be gleaned from the stringent provisions of the law. Aside from the broadened powers of the NEA and the very detailed, exacting and apparently tedious and voluminous list of reportorial requirements, there is also this dreadful prospect of the exercise by the NEA of the power to “step-in and takeover” what are found to be “ailing cooperatives”. Worse, there are also penal consequences for violations of the law, which include imprisonment.

Kaya naman naiintindihan ko ang inyong kalagayan. Nabalitaan ko nga na naghain kayo sa Supreme Court ng petisyon para madeklarang unconstitutional itong RA 10531. Malaki kasi talaga ang naging pagbabago, at matindi rin ang mga kalakip na epekto ng hindi pagsunod sa batas.

Mamaya, paki-update ninyo ako kung ano na ang status ng inyong petition, para naman hindi ako mahuli sa balita!

In any event, without delving into the merits of your petition or the constitutionality of the law—which is presumed valid and constitutional, by the way, as a byproduct of Congress—there is still room for cordial discussion, even for academic purposes only, and for cherishing the idea of a healthy and harmonious working relationship between among the regulators and the participants, most especially the electric cooperatives.

First and foremost, based on all the reforms in the power industry, we can see that the government naman is also trying to protect the interests of the private players, especially the electric cooperatives, just as much as it is trying to promote the welfare of the public and the consumers.

Kaya naman noon pa mang EPIRA ng 2001, lumabas na ang panukala ng condonation ng mga utang ng mga electric cooperatives sa NEA, at ang pagsalo ng mga ito ng PSALM. Dahil pa nga rito sa isyu na ito, nagkakaroon ng pagtatalo sa pagitan ng NEA at ng PSALM, tungkol sa mga deductions ng PSALM sa total na binayad nito dahil sa di-umanong “overcollection” ng NEA.

In spite of all the criticisms, we can see that the law is working and is being observed. According to the data supplied to me by the NEA, as of 31 March 2015, the balance of the loan shouldered by PSALM now stands at P2.1 billion, with a collection efficiency rate of 88%. Better yet, what is more inspiring news is that among the thirteen (13) members of PhilFeCo, eight (8) have already posted a “FULLY PAID” status as far as the NEA is concerned!

And mind you, this is not just a simple and inconsequential description of the status of the loan obligations of the concerned electric cooperatives—na para bang isang ordinary Facebook status lamang. It means a lot of things. It signifies the electric cooperatives’ faithful compliance with all the operational requirements. It means that they have honored religiously their end of the bargain. Most important of all, it means that they made sure that their member-consumers have also tangibly benefited from the resulting savings, in the form of reduction in their electric bills.

Which is why I most ardently implore PhilFeCo to give this new regulatory arrangement a chance. Of course, just like any endeavor, there are bound to be “birth pains”, initial resistance, opposition, or even hostility. But sooner or later, the calculated benefits will manifest themselves. In the long run, I am confident that the calculated benefits will far outweigh the imagined toll on our cooperatives.

True to our nature as cooperatives, let us all “cooperate” to allow the law to show what it can do to improve the industry and the public service, especially during this crucial period where we are being told that we are in crisis. Let us hark back to the etymological make-up of the word “cooperative”. ‘Di ba, it comes from the Latin words CO (together) + OPERARI (to work), thus expressing the ability to exist and work together?

Bilang mga tunay na kooperatiba, likas dapat sa atin na makisama, makibagay, makipagkaisa at makipagtulungan. Kung atin namang pagninilayang mabuti, para rin naman sa ating kapakanan bilang mga kooperatiba itong mga pagbabago na ito.

You see, the intentions of the law are clear, and one is to professionalize the leadership and governance of electric cooperatives. From the reportorial requirements, to the “fit and proper rule”, to the insulation of the board of directors from political influence and other unethical interests, all these are geared towards raising the standards of the organization, cognizant of the fact that public interest is at stake.

Because of the law, the corporate governance standards and leadership qualifications for electric cooperatives are now on a par with those for banks, insurance companies, and even government-owned/controlled corporations (GOCCs). Their common denominator seems to be that they are all entrusted with the public welfare.

We need all these reforms. The consumers and the public demand them. These cooperative reforms are the envisioned building blocks towards an organizational structure and culture and a business environment that promote and breed transparency, competitiveness, professionalism, business efficiency, and the maximization of the benefits for the owners and their communities.

Sana ay magtiwala tayo sa batas na ito, at sa kakayahan din ng NEA. Sana ay buong puso nating ibigay ang ating lahat ng makakaya upang siguruhin na maging alinsunod sa batas ang pamamalakad natin sa ating mga kooperatiba.

With regard to the “step-in and takeover” powers of NEA, we are reassured by the safeguard that these are made subject to clear and stringent conditions and limitations. For one, this power can only be exercised in the case of “ailing” cooperatives, or those that fail to meet “operational and financial standards” set by NEA. And in all cases, the NEA is bound to “strictly observe due process of law”. If these were not enough, please rest assured that the NEA is subject to our Congressional oversight with regard to its implementation of this particular law.

I assure you of my full support for the fair, rational and logical implementation of this law, especially on particular matters affecting our electric cooperatives. As Vice-Chairperson of the Senate Committee on Cooperatives, nakabantay at nakamatyag ako sa mga mahahalagang mga isyu at mga problema na kinakaharap ng ating mga kooperatiba.

Isa lang ang ibig sabihin nito: MALAKAS KAYO SA AKIN! Kayo pa?! Nakasalalay sa inyo ang pag-angat ng kapakanan ng publiko at ng ating mga komunidad sa isang mahalagang larangan. Kaya makakaasa kayo sa aking buo at todong suporta. Ginagawa ko ito para sa karamihan ng ating mga kooperatiba; bakit naman hindi ko gagawin para sa ating mga isang-daan at labing-siyam (119) na mga electric cooperatives, lalung-lalo na para sa labing-tatlong (13) miyembro ng PhilFeCo?

Pinahanga ninyo ako sa inyong magandang record. I am buoyed particularly by the information from NEA that as of 31 March 2015, we have an eighty-two percent (82%)-electrification nationwide, courtesy of our 119 electric cooperatives. Of this total, PhilFeCo members boast of an eighty-five percent (85%)-electrification coverage in their respective territories—which is higher than the national average. Congratulations! Keep up the good work! Onward to 100%-electrification, in line with your “100-100 Vision”!

Which brings me to my final point. We may all ask: “what’s in it for us?” Ano ba ang meron para sa ating mga electric cooperatives?

If there is one clear provision under RA 10531 that can be a source of inspiration rather than pessimism, excitement than terror, for our cooperatives, it is the grant of incentives upon our true-blue, dyed-in-the-wool and high-performing electric cooperatives registered with the CDA, most especially upon those “that are managed effectively and efficiently and comply consistently with (NEA’s) mandates and standards”.
Then, on the other hand, our Cooperative Code, RA 9520, also lines up very encouraging incentives for our cooperatives, most notably the tax exemptions and other substantial privileges.

RA 9520 and RA 10531 obviously are related laws, and thus can be concurrently applied. This means that eligible electric cooperatives can simultaneously avail of and can be entitled to both sets of incentives under these two laws.

So, this event of yours gave me an idea. As de facto Chairman of Committee on Cooperatives, I want to call for an inquiry in aid of legislation to specifically ask CDA and the NEA about the simultaneous availment of electric cooperatives of the incentives under the two laws, in an attempt to find harmony of application between the two. Because in my view, logic dictates that our electric cooperatives should be allowed to avail of both sets of incentives under these laws.
I’ll keep you posted on that plan of mine. Isama natin sa usapan ang iba pa ninyong mga kasamahan, mula sa liderato ng inyong national association at ng iba pang mga federations.

Going back to our theme...

“For the lost to be finally found”—the flip-flopping NEA jurisdiction under our previous laws has finally been settled.

“For the least to be the foremost”—precisely, this is the work being done by our electric cooperatives in connecting the countryside onto the grid and in achieving 100%-electrification of our rural areas.

“And for the last to be the first”—dati, maaaring tayo ang huling nagtitiwala at nakukumbinsi sa mga ginagawang reporma ng ating gobyerno. Sa tulong ninyo, sana tayo na ngayon ang manguna sa pagtitiwala at paghangad sa mga magagandang pagbabago na nais ipatupad ng ating batas.

Lastly, perhaps we may fittingly add another biblical theme: For the sick and the “ailing”…to be healed—and not to just be simply taken over immediately!

Makakaasa po kayo sa aking suporta sa mga electric cooperatives!

Hanggang dito na lamang po!

Mabuhay ang Philippine Federation of Electric Cooperatives (PhilFeCo)! Mabuhay ang ating mga electric cooperatives!

Hanggang sa ating muling pagkikita! Maraming salamat po, at muli po, magandang hapon sa inyong lahat!