MANILA, PHILIPPINES | Wednesday, January 26, 2005

Energy secretary quits
Energy Secretary Vincent S. Perez, Jr. yesterday said President Gloria Macapagal-Arroyo had accepted his request to resign his Cabinet post and to return to the private sector.

He told reporters he would end government service by March 31, after four years at the Department of Energy, and that Mrs. Arroyo has yet to name his replacement.

"I leave with very fond memories. My relationship with Malacañang and Congress is extremely cordial. I have been here since 2001 and I have developed friendships I will keep for life," Mr. Perez said.

He also said he recommended to the President several people as his possible successor. Among those reportedly being considered are National Transmission Corporation (Transco) President Alan T. Ortiz, and Power Sector Assets and Liabilities Management Corp. (PSALM) President Raphael M. Lotilla.

But industry sources said the new Energy secretary should have no biases. "It better be one who can steer the industry in the right direction, given its importance to solving the fiscal crisis," one source said.

For his part, businessman Raul T. Concepcion said he would push for a review of the deregulation of the oil industry. "All I can say is that Mr. Perez, for the past months, has been working closely with us. We seem to agree on what to do, especially with high oil prices. But he is handicapped because of the deregulation law. He cannot dictate to oil companies what to do," said Mr. Concepcion, who is also chairman of the Consumer and Oil Price Watch.

He noted that Mr. Perez joined Energy at a time when contracts with power plants were being scrutinized and the peso was depreciating.

"He renegotiated the contracts. By and large, considering the difficulties he went through, in general, my rating of him is good," Mr. Concepcion said.

Mr. Perez clarified that his decision to resign was not a "spur of the moment" or a "reaction" to anything in particular.

He said he had been discussing his resignation with Mrs. Arroyo since last year.

NO MORE DELAYS

Senators have been questioning Mr. Perez about delays in power industry reforms and several budget issues.

"I have been asked by the President to extend my term until the end of March to ensure that Napocor's [National Power Corp.] and Transco's privatization efforts will remain on track," he said.

The Energy chief noted he still has a number of things to accomplish before leaving his post.

He will meet with the Joint Congressional Power Commission this week, and update investors on the schedule for the privatization of Napocor and Transco next week.

"We cannot afford to delay. We must try to do the different reforms now. There's still five years left in this administration and five years is a long time," he said.

After his last day in office, Mr. Perez said, he will make up for lost time with his family, especially his father, Vicente Abad Perez, who is battling advanced Parkinson's disease. "I have no immediate plans of joining any private firm after I resign. I just want to rest, play golf, take my father sailing, and just catch up for lost time," he said.

When asked if he was willing to return to government, Mr. Perez answered, "one can never say never."

During his four-year stint as Energy secretary, his department sold six state-owned power plants, provided electricity to 6,634 barangays, and improved the country's energy self-sufficiency to 56% by 2004 from 45% in 2000, among others.

Mr. Perez also laid down the foundation for a wholesale electricity spot market by 2006.

He also promoted clean indigenous energy such as natural gas, and set a goal for the Philippines to become the world's largest geothermal power producer and Southeast Asia's leading wind power producer.

"I was tasked by the President to implement critical reforms in the power sector, reorganize the public sector, ensure that Luzon-wide blackouts would no longer recur, address the power requirements of Visayas and Mindanao, and lay the groundwork for the crucial privatization of Napocor and Transco," Mr. Perez said.

"I ask everyone, especially my Energy family, to fully support my successor in implementing power reforms, specifically the privatization program, and in ensuring adequate energy supply for the rest of the decade. We simply cannot afford any delays," he added.

Mr. Perez was 42 when Mrs. Arroyo appointed him as Energy secretary in June 2001 to implement the Electric Power Industry Reform Act. Prior to this appointment, he served briefly as undersecretary at the Department of Trade and Industry, and concurrent Managing Head of the Board of Investments.

Before joining the government in March 2001, he was involved in private equity and capital markets abroad.

Mr Perez holds an MBA from the Wharton Business School of the University of Pennsylvania, and a Bachelor's Degree in Business Economics from the University of the Philippines.

THANKLESS JOB

Meanwhile, the business community said Mr. Perez's resignation had long been anticipated.

"That's not a secret that he wanted to resign," said Sergio R. Ortiz Luis, chairman of the Philippine Chamber of Commerce and Industry.

He noted that the Energy post was a "thankless job."

"If you are doing reforms you are not going to please everybody. It's a damn-if-you-do-damn-if-you-don't situation," he added.

Peter Wallace of the Wallace Business Forum said Mr. Perez did "a good job."

"We're quite pleased [with his work at the Energy department]. It's a hard job," he said in an interview.

He also said the President should quickly announce Mr. Perez's replacement.

Mr. Wallace added the next Energy chief should concentrate on putting up new power plants to avoid another energy crisis. "That's the number one priority today, all else comes next," he said.

Napocor's privatization alone will not solve the problem, he added.

Congress should allow the President or the Energy department to directly negotiate for new power plants, the way former President Fidel V. Ramos did in the 1990s, Mr. Wallace said.

In other countries, new generation facilities can easily be built at the cost of $1 million per megawatt, he said.

Also yesterday, President Arroyo thanked Mr. Perez "for the valuable assistance he has given her and for his personal financial sacrifice, during his four years of dedicated service to the government."

A statement released by the Palace also said the President would announce his replacement "at the appropriate time."

The President also cited Mr. Perez's efforts in implementing power sector reforms, privatizing Napocor, and accelerating rural electrification.

Mrs. Arroyo also said she hoped to keep Mr. Perez in government, conveying her "strong wish" that he continue to help attract more investments into the Philippines.

Malacañang said the President requested Mr. Perez to stay until March 31 to ensure that the privatization of Napocor and Transco would be "on track."

TOO HOT

But Senate energy committee chairman Miriam Defensor Santiago said Mr. Perez resigned because of pressure from the power sector idnustry as well as legislators over the sale of the state-owned Masinloc coal power plant.

"He has found the kitchen to be too hot. There was severe pressure from the power wielders, not to mention lawmakers. A lot of strings have been pulled. We will not let go off the topic of the Masinloc sale," Ms. Santiago said.

The lawmaker noted that the Joint Congressional Power Commission would scrutinize the sale in a public hearing today, despite Mr. Perez's resignation.

Ms. Santiago also expressed dismay that a congressman tried to pressure her to accept YNN Pacific Consortium Inc. as the winning bidder for the 600-megawatt Masinloc coal-fired power plant. The company offered $561.7 million.

Several legislators have questioned the sale since the winning bidder has a paid-up capital of only P625,000, and maximum capitalization of only P10 million. -- Bernardette S. Sto. Domingo, Felipe F. Salvosa II, Jeffrey O. Valisno and Carina I. Roncesvalles