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[av_heading heading=’AN INDEPENDENT VIEW ‘ tag=’h3′ style=’blockquote modern-quote’ size=’30’ subheading_active=’subheading_below’ subheading_size=’15’ padding=’10’ color=” custom_font=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” admin_preview_bg=”]
BY NEIL HONEYMAN
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Tuesday, November 28, 2017
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ON NOV. 16, 2017, Energy secretary Alfonso Cusi wrote to Justice secretary Vitaliano Aguirre II. Cusi is seeking to reactivate the dormant joint DOE-DOJ task force with a view to deciding whether or not petroleum prices are reasonable. I find it interesting that Cusi is not suggesting that the Energy Regulatory Commission (ERC) be involved. Is this significant? Is ERC being sidelined?
The problem of the oil industry is the possibility of cartelization and hence predatory pricing. This is difficult to prove but an active and tenacious government task force can do much to ensure that abuses do not occur.
A major problem in the areas occupied by Panay Electric Company (PECO) and Central Negros Electric Cooperative (Ceneco) is that the price of electricity is too high. The ERC has not been effective in controlling electricity costs. It has not been active in promoting the Wholesale Electricity Spot Market (WESM) where, normally, the price of electricity is lower than the contracted prices paid by PECO and Ceneco to their suppliers.
We believe that the DOE should examine the contracts signed by PECO and Ceneco to assess whether they are fair. The PECO results should comprise part of the discussions as to whether PECO’s franchise should be renewed in 2019.
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The major German insurance company, Allianz has formed a joint venture with the Philippines National Bank (PNB). Allianz PNB Life Insurance Inc. has joined other insurance companies in bemoaning the low levels of insurance availment in the Philippines. Allianz PNB Life Insurance President and Chief Executive Offer Olaf Kliesow has said that insurance tends to be complicated and not transparent. True. Of fundamental importance also is that the populace has well-founded trust issues with insurance companies. The Insurance Code is biased towards the insurance company at the expense of the client. For example, I can agree with my insurance company as to be value of my house, but if the property is destroyed then this agreement counts for nothing and, in practice, I would have to accept the offer made by my insurance company. We need an Insurance Code which levels the playing-field.
The Insurance Commission is not effective at ensuring that clients are treated fairly. Because of this, and because banks are increasingly active in the insurance sector, I propose that the Insurance Commission be transferred to become part of a wide-ranging Financial Services Commission (FSC) which should be situated in the Bangko Sentral ng Pilipinas (BSP).
The FSC would be charged with the responsibility of establishing undoubted probity throughout the financial services sector. This would enable the sector to more adequately meet the pent-up demand that currently exists. (jbabueg@yahoo.co.uk)/PN
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