MANILA, May 26, 2008 (STAR) By Paolo Romero - Malacañang said it is maintaining its distance in the looming battle between the Lopez family and Government Service Insurance System (GSIS) general manager Winston Garcia over control of the Manila Electric Co. (Meralco) when the utility firm holds its annual stockholders’ meeting tomorrow.

Executive Secretary Eduardo Ermita said Malacañang and President Arroyo made no comment on what Garcia should do over the issue of taking control of the Lopez-led Meralco.

“There is no such guidance coming from Malacañang or from the President to Mr. Garcia on what he should do with regards to Meralco,” Ermita said.

Ermita issued the statement ahead of Meralco’s annual stockholders’ meeting tomorrow where Garcia has vowed to push for a change in Meralco’s management.

GSIS has a 23-percent stake in Meralco, which is now in the crosshairs of the Arroyo administration as it tries to reduce power rates within the distribution utility firm’s franchise area.

Garcia has reportedly threatened to file large-scale estafa charges against Meralco chairman and chief executive officer Manolo Lopez.

Garcia had raised questions over the billions in meter deposits allegedly owed by Meralco to its customers.

“I think Mr. Garcia is just acting on behalf of the GSIS,” Ermita said.

He reiterated President Arroyo’s declaration early in her term that “corporate battles are for corporations.”

He said Malacañang is keeping its hands off the possible showdown during the stockholders’ meeting and will respect its outcome.

Upon orders of Mrs. Arroyo, the Department of Trade and Industry (DTI) initiated a petition before the Energy Regulatory Commission (ERC) to compel Meralco to lower its rates.

Critics and opposition leaders saw the government’s action against Meralco as both an attempt to show the people burdened by the rising cost of living that it is doing something and a move to tame the Lopez-owned ABS-CBN network giant, which is seen as being critical of the administration.

The suspicions were bolstered by the fact that Mrs. Arroyo’s allies in the Senate and the House of Representatives have also been hitting Meralco and pushing for a change in management, raising fears of government interference in corporate affairs.

Ermita pointed out that Mrs. Arroyo had formed the Cabinet study group to validate the claims of Meralco and GSIS in an effort to show that she was not taking sides amid her calls to lower power rates.

Chief Presidential Legal Counsel Sergio Apostol said Malacañang couldn’t predict the outcome of the stockholders’ meeting even as he reiterated calls for transparency in the management of Meralco.

He said the government would not interfere in corporate matters but expects Garcia “to do his best” to protect the interests of GSIS.

Garcia had been critical of the Lopezes and the way they manage Meralco.

He said Meralco’s own financial statement showed that the power distribution firm used some P14 billion in meter deposits instead of putting the amount into a trust fund account for each customer.

“The meter deposits were included by Meralco in its payable account, which means that Meralco used the money as a loan which will eventually be passed on to its customers,” Garcia said.

The ERC had ordered Meralco not collect meter deposits in 2004. Garcia said Meralco has yet to refund the amount collected.

Garcia claimed the P14 billion has already ballooned to P21.4 billion, including interest earned.

He said Meralco failed to explain how it used the meter deposits and make a full accounting of the collected amount.

The GSIS, along with other government financial institutions (GFIs), holds four board seats in the11-member Meralco board. The Lopez family, on the other hand, holds five.

Garcia earlier warned the Lopezes against trying to reduce the seats held by the GFIs in Meralco through what he describe as “dirty tactics.”

GSIS and Meralco management are at loggerheads following the pension fund’s acquisition of the government’s stake in the power firm.

Last January, GSIS bought the government’s less than 10 percent stake in Meralco for P8.9 billion. The transaction thereby increased the GSIS stake in Meralco to about 23 percent.

Since the acquisition, Garcia has been asking management to furnish him with copies of Meralco’s financial and operational documents.

At present, the Lopez group, through First Philippine Holdings Corp. (FPHC), holds a 33.4 percent stake in Meralco.

Other government entities such as PhilHealth, the Land Bank of the Philippines, Social Security System, and Pag-Ibig Fund hold a combined 10 percent stake.

This and the GSIS’s 23 percent stake in Meralco bring the government’s total stake in the power firm to 33 percent. - With Iris Gonzales

GMA  TACKLES  TUITION  FEE  ISSUES By Marvin Sy May 26, 20008

(STAR) President Arroyo is expected to make an announcement on the issue of tuition increases set to be implemented by private schools in the coming semester.

In an interview over dzRB, Presidential Management Staff director general Cerge Remonde said he and Commission on Higher Education Chairman Romulo Neri have given their recommendations to the President.

Parents and students alike have been calling on the government to issue a moratorium on tuition hikes as reports have indicated that at least 300 tertiary schools are to raise fees by an average of 10 percent.

They argued that the tuition increase would only add to their present burdens like the continued rise in the prices of fuel, rice and other basic commodities.

Mrs. Arroyo has instructed Remonde and Neri to coordinate with each other and come up with a response to the clamor of the concerned sectors.

Remonde said he met with Neri and CHED executive director William Medrano and they were able to report their recommendation to the President last Friday. He, however, declined to give details.

“All I can say is that we’ll just wait for the announcement from her that will be welcomed by the people when it comes to the issue of tuition, especially with the start of the new school season,” he said.

Based on the schedule of the President provided by Malacañang, Mrs. Arroyo is set to attend an inter-agency command conference for the school opening during her visit to a school in Manila tomorrow.

The command conference would be led by the Department of Education and joined by representatives of the Metropolitan Manila Development Authority, Philippine National Police, Department of National Defense, Department of Trade and Industry, Department of the Interior and Local Government, Philippine Atmospheric, Geophysical and Astronomical Services Administration, Department of Public Works and Highways, Manila Electric Co. and the Metropolitan Waterworks and Sewerage System.

Remonde said that “hopefully” the President would make the announcement on tuition tomorrow.

Chief News Editor: Sol Jose Vanzi

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