Monday, October 27, 2008

Lopez Family Wins: GSIS stake in Meralco sold to San Miguel

I laud the Energy Regulatory Commission (ERC) for deciding to suspend the implementation of a Meralco rate hike this November. The ERC acted on the petition of NASECORE for the ERC to review the grant of a rate hike by Meralco. That's good news.

What is not good news is the sale of GSIS stake in Meralco. San Miguel Brewery just bought the shares to be paid within 3 years. GSIS expects to earn about 12 billion pesos from the sale of the shares.

I'm sad because there's no more way for the government to pursue the cause of the people within the board of Meralco. The fact that GSIS lost more than 600 million pesos worth of investments is really a concern. It shows how vulnerable GSIS is in equities trading and exposes the risk-taking attitude of those who handle the pension fund. 

With government out from two critical sectors (Government just agreed to sell its stake in Petron, and now, in Meralco), expect these companies to do bold acts such as unabated price hikes. What will happen to the calls of the GSIS for Meralco to come clean? Nothing! Government right now will not have any say on electricity and oil prices. 

GSIS President Winston Garcia may have felt betrayed right now since all his efforts at forcing Meralco transparency went to naught. Come to think of it, may sectors expected Garcia to just sell the stake. His braggadocio was actually just a way for him to raise the stock value of the shares. For a moment, it diluted those stocks. Yet, the lack of foresight by GSIS caused it to fail against the giant electricity distribution firm.

Lopez won....again. Who will finally make the Lopezes kneel?


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