Our Country’s PESTLE: Today and Tomorrow

Address delivered by retired Chief Justice ARTEMIO V. PANGANIBAN during the TeaM Energy Corporation’s Senior Management Session held at the Shangri-la at the Fort Hotel, Taguig City on November 14, 2019.


President John Alcordo and esteemed members of the TeaM Energy Management Team.

A beautiful lady-tourist slipped on a ship and fell into the sea. Amid the commotion, a man dived and went on to save the woman from drowning. When the “hero” climbed aboard with all the passengers clapping, he was asked for a speech, and the first thing he said was: “All I want to know is who pushed me?”

By your laughter, you love jokes. Here’s one more from Fr. Jerry Orbos. A priest said in his homily: “I have good news and bad news. The good news is that there is enough money to complete our church. The bad news is that the money is still hidden deep in your pockets.”

I have also good news and bad news. The good news is that Christmas is just six weeks away and Christmas bonuses 10 times more than last year’s will be granted today. The bad news is that the good news is fake news.

One final joke. A naughty teenager climbed atop a very tall tree. No one, not even his father and mother, could make him come down with loud threats to spank him and to stop his school allowance. Finally, his grandfather named Mang Art, ehem, went near the tree trunk and gently told the boy something very softly. And immediately, the boy slid down. When asked to explain how he disciplined the boy, the grand pa said, “Well, I softly told him that I came with a motorized saw to cut down the tree. And immediately, he understood the risks to his limbs and life.”


Three Speech Topics

Seriously now, I thank our President John V. Alcordo for inviting me today to give my thoughts on what he called the “PESTLE (Political, Economic, Social, Technological, Legal and Environment)” situation of our country now and in the future. Specifically, he requested me to discuss (1) the three branches of our government; (2) the important legal/regulatory/political factors or trends TeaM Energy should consider in the next few years; and (3) in view of the end of the cooperation period, my thoughts on life after retirement.


Separation of Powers

On the first item, our Constitution, as you probably know, instituted the doctrine of separation of powers and the American presidential system backed-up by the corollary system of checks and balances. In this way, it recognized and hoped to avoid the evil of concentrating governmental powers in only one person or group of persons which, as world history has repeatedly demonstrated, leads to dictatorships, abuses, corruption and violations of human rights.

Thus, pursuant to this tripartite system, legislative power, or the power to enact laws, is vested in a bicameral Congress composed of (1) the House of Representatives, with 80 percent of its members elected in their respective congressional districts and 20 percent nationally chosen via the Filipino-style party-list system. All of the representatives, whether district or party-list, have a term of three years to sit for a maximum of three consecutive terms or a total of nine consecutive years, and (2) the Senate, composed of 24 members elected nationally with a term of six years each with one consecutive reelection. The term limits were conceived with the laudable aim of preventing political dynasties and lifelong addictions to political power.

Executive power, or the power to execute the law, is vested by the Constitution in the President, to be elected for a term of six years without reelection. He is assisted by the Cabinet composed of department secretaries, whom he or she appoints, with the consent of the Commission on Appointments composed of 24 members of Congress, with the Senate President as chairman.

The third branch of government composed of the Supreme Court and the lower courts is vested the judicial power or the power to interpret the Constitution and the laws. They could, upon the filing of the appropriate cases, review and strike down the statutes passed by Congress as well as the executive actions of the President for being unconstitutional or for having been issued with grave abuse of discretion. This power to strike down acts committed with grave abuse of discretion is a distinct and unique power not granted to other judiciaries in the world. It was given to our judiciary to prevent the President from abusing his or her power, as President Ferdinand Marcos had done during his over two decades in office. Moreover, the Constitution did not define the meaning of “grave abuse of power.” It left the definition to the Supreme Court itself. This unique anti-grave-abuse power was intended by the framers to enable the Supreme Court to stop the abuses of a corrupt and dictatorial President.


Checks and Balances

Under the corollary system of checks and balances, each of the three great branches of the government is granted powers to prevent the other two from abusing or exceeding their constitutionally-allocated powers.

For example, the President checks Congress by the power to veto bills that are unwise or inappropriate. Also, the President, through the Budget Secretary, may refuse to release funds allotted for the pet projects of the members of Congress. The President may check the Supreme Court by the power to appoint its members from a list of at least three nominees submitted by the Judicial and Bar Council or JBC. The problem though is that of the seven members composing the JBC, the super majority are appointed or controlled by the President. Thus, the JBC’s role in checking the President becomes illusory since he names the four regular JBC members plus the Secretary of Justice, who automatically sits in the JBC as an ex-officio member. Moreover, while the JBC is required to nominate at least three persons for each vacancy, all that the President needs to do is to have his or her favorite candidate included among the nominees.

On the other hand, Congress may check the President (1) by its power to confirm or reject or by-pass presidential appointees, and to refrain from enacting laws – including the appropriation bills – wanted by the Chief Executive; and (2) by its investigative and oversight powers to pass upon excessive or irregular acts of executive officials. Further, it may check the President and the judiciary by its authority over the budget and by its power to impeach and remove him or her and the Supreme Court justices. However, the budgetary power is limited by the constitutional ban against the reduction of the appropriations for the judiciary to a level below the amount allocated during the prior year, and by the ban to reduce the compensation of justices and judges.

In turn, the Supreme Court, in appropriate cases, may check the President and Congress by declaring executive or legislative actions invalid or illegal or unconstitutional or gravely abusive. However, sometimes this judicial power becomes illusory when members of the Court compromise their independence and integrity by being subservient to the appointing authority.

This was especially true during the martial law regime of President Ferdinand Marcos. The same charge of subservience had been hurled by critics against some recent decisions of the Supreme Court that (1) allowed the burial of Marcos’ remains at the Libingan ng mga Bayani, (2) acquitted former President Gloria Macapagal-Arroyo of plunder, (3) granted bail to former Senator Juan Ponce Enrile, (4) ousted Chief Justice Maria Lourdes Sereno via quo warranto, and (5) authorized the declaration, and later, the extension of martial law in Mindanao.


Autonomous Constitutional Commissions   

In addition to the three great and independent branches of government, the Constitution also created autonomous, non-partisan and independent offices. They are the Commission on Elections, Civil Service Commission, Commission on Audit, Office of the Ombudsman, and the Electoral Tribunals of both houses of Congress. The acts, however, of these constitutionally-created commissions are subject to a review of the judiciary in appropriate cases.


Theory versus Practice

While in theory the three great branches of the government are equal, in actual fact, however, the Presidency is the most powerful because the Chief Executive is the commander-in-chief of the military and the police. And again, though theoretically, Congress has the sole power to appropriate funds for the government, such power is really limited by the authority of the President to propose the national budget before it is taken up by Congress. Moreover, the Budget Secretary who is a subordinate of the President controls the releases of the funds appropriated by law. Also, he or she has the power to veto entire laws or line items in the budget.

Truly, having control of both the sword and the purse of the government, the Presidency is really the most powerful branch. Moreover, his control is easy to wield because it is singular while the power of Congress is collegial and bicameral, while the power of the Supreme Court is likewise collegial though mercifully unicameral. Hence, being collegial, these two branches – weaker as they already are – need deliberation and majority vote before action could be made. Additionally, being a passive branch, the Supreme Court cannot act unilaterally on its own volition. It needs an appropriate petition to be able to act and decide.

Also, in the real world of politics, the House of Representatives is traditionally easy to sway in favor of the President. This had always been the case since the new Charter took effect in 1987. During elections, there may be many disparate parties vying for popular support, but after the election is over, most of the political parties and the elected members of Congress realign their political loyalties and essentially gravitate around the President. Thus, under the 1987 Constitution, no Speaker of the House has been elected without the support of the President. Unlike the prior Constitutions which encouraged the two-party system, the present Charter allows, nay encourages, multiple parties. And, unlike in the United States, political parties became mere convenient vehicles of election, no longer organizations with known platforms, principles and aspirations to which they stick no matter the result of the election. Sadly however, party-hopping and political butterflying have become very common since 1987.

So too, term limits have been rendered inutile by dynastic politics and by the rotation of plum political posts by the same families or clans.

Moreover, out of the Filipino trait of “utang na loob,” or gratitude to the appointing authority, many (but not all) jurists tend to favor the President. This bias in favor of incumbent Chief Executives is justified sometimes by the excessive reliance on the judicial doctrine of regularity in the performance of official duties and on the judicial policy to uphold the government in case of doubt. Furthermore, there is unusual stress on the presumption that the government is correct and in good faith in its execution of the law. The administration of justice is also hampered by inefficiency, incompetence, laziness or worse, corruption of some judges, prosecutors and other officials. “Justice delayed is justice denied” is an axiom so often bewailed, it no longer raises hackles.


Legal, Regulatory and Political Factors

Let me now turn to the second topic, the important legal, regulatory and political factors that can influence the future of power generation. Essentially, the energy business has been divided into three interdependent areas; namely, generation, transmission and distribution. In the past, both the law and the public focused merely on the distributors of electric energy, especially on Meralco, because they are the ones who deal directly with and bills the consumers. Lately however, the two other components, the generators and the sole transmitter – the National Grid Corporation of the Philippines – have been the subject of controversy and regulation. In the past, generators have been allowed to sell their production freely via power sales agreements or PSAs or through the open market via the WESM. Now, the trend is for the government to intervene via special high rates or feed-in-tariffs (FIT) to green energy, or via the Philippine Competition Commission, or via the grant of more powers to the Energy Regulatory Commission and the Secretary of Energy. Congress has increasingly gone into legislative inquiries and into taking up new bills that torment the energy business. Worse, the government has increasingly defaulted in its commitments on the rates of distribution, changed the generation requirements, and allowed generators to sell directly to bulk consumers. Some of these initiatives favor our company, while some others make its business more difficult and tiresome.

Undoubtedly, however, there is a growing trend to lean towards green energy like hydro, river, ocean, geothermal, natural gas, wind, and solar. Even nuclear power has regained some momentum after billionaire Bill Gates devoted several billions dollars researching on why the Chernobyl and Fukushima nuclear plants exploded in disaster and on how to make nuclear energy safe, cheap and available 24/7, unlike wind and solar which need gigantic and expensive batteries to make them available 24/7.

In this connection, may I just mention in passing that during the visit of President Rodrigo Duterte to Russia in early October, 2019, media reported that a so-called Memorandum of Intent was signed between our Energy Secretary Alfonso Cusi and Evgeny Pakermanov of the Rusatom Overseas Company of Russia to “explore the prospects of cooperation in the construction of nuclear power plants in the Philippines.” There had been, since then, no follow-up story on this subject perhaps because no real positive avenue had been opened to allow nuclear power in our country.

May I also say that the United Nations – through its Secretary General Antonio Gutierres – has, during a press conference on November 2, 2019 just before the meeting of the Association of South East Asian Nations or Asean, warned Asia to quit its “addiction to coal.” In contrast however, the Japan-backed Asian Development Bank, through its President Takehito Nakao, stated that it is not yet ready to stop funding coal projects especially in countries where “there is no access to other options.” A similar policy of China-based Asian Infrastructure Investment Bank was aired by its senior energy policy specialist, David Morgado right after the ADB made known its policy.

Anyway, whether it be green or otherwise, the Philippine need for electric power, whether for base load, mid-merit or peaking, is growing rapidly. Statistics revealed by the First Gen Corporation show that the Philippines’ power demand has expanded “at a robust 5.3 percent compounded annual growth rate (CAGR) in the last 10 years on the back of the country’s strong economic and population growth.” Moreover, our country’s “load profile needs a diversified energy mix that can cater to the peaks and valleys of demand throughout the day. The grid is currently dominated by coal plants. This trend is expected to continue even as 4,385 MW of coal plants are currently in the pipeline. From 37 percent of supply, coal will constitute 46 percent of supply by 2025 based on estimates of the Department of Energy.”

Let me now take up the macro view. According to a World Bank Report titled “Philippine Economic Update: October 2019 Edition,” the Philippine economic growth “slowed to its lowest level in eight years, driven by a rapid deceleration in investment growth in the first half of 2019. GDP growth slowed from 6.3 percent year-on-year in the first half of 2018 to 5.5 percent in the same period in 2019, below the government’s growth target of 6-7 percent in 2019.” Consequently, the World Bank “revised down the country’s economic growth for 2019 from 6.4 percent to 5.8 percent before recovering to 6.1 percent in 2020 and 6.2 percent in 2021.” On the other hand, Finance Secretary Carlos Dominguez in a speech last November 5 is optimistic our country can still attain the “lower end of its projection of 6-7 percent GDP” for this year.

Be that as it may, the Philippine performance is still comparatively much better than many other countries. The same World Bank Report states that “Weaker investment growth and declining trade and manufacturing activity contributed to continued subdued global growth in the first half of 2019. The global real GDP growth rate was estimated at 2.6 percent in 2019 – lower than the 3.0 percent recorded in 2018 and a downgrade of 0.3 percentage points from the growth forecast in January 2019.”

These comparable World Bank figures show that while the Philippine slowed down its growth, it is still much better off than the worldwide average. And this comparison makes the Philippines a much better investment venue, if – and this is the big if, – the country can reform its archaic government policies and make itself a better venue for local and foreign investments. How?

The World Bank listed both short term and long term solutions, to which I generally agree. In the short term, the World Bank supports the 10-point economic program of the government that includes “game-changing (legislative) reforms… such as the Ease of Doing Business Law, the Rice Tariffication Law, the (National) ID Law, the National Payment Systems Act, and the move towards Cash-Based Budgeting.”

In the long term, the World Bank urges the country to continue “promoting competition to foster quality job creation” and thereby “enhance the impact of economic growth on poverty reduction and shared prosperity.” The World Bank added that the competition should specifically be in the “markets in manufacturing, wholesale/retail, agriculture, and transportation/storage…”

Significantly, the World Bank Report did not touch on the electric power industry, showing that the collaboration between the government and the business sector in the privatization of the generation and transmission aspects are satisfactory, even if they must, in my humble view, be looked into especially in the next few years when demand would outpace supply.


No retirement, just a change of tires

I now come to the third topic, what we should expect when the cooperation period ends. To begin with, TeaM Energy, I am sure, would still be around even if the Sual Plant is turned over to the government or to San Miguel. TeaM would still have interests in other generating plants like Pagbilao. As you all know, perhaps even better than me, TeaM is looking into possible investments in green energy like in Citicore and other existing plants.

I do not know why brilliant people, like our President John who is young enough to be my grandson, are now thinking of life after the cooperation period, and even of possible retirement. By my own experience, retirement merely means a change of tires to embark on a new journey. It does not mean the end of work. I retired from law practice and from my active social and civic life in 1995 to embark on my hermetic and ascetic life at the top of the judicial Mt. Olympus as a Supreme Court member, free from the hustle and bustle of my old life in the plains. I worked day and night to write the most number of decisions, about 1,200 full length judgments during my over 11 years in the Court, aside from authoring one book of over 400 pages every year, books reporting on the accomplishment of the high court, especially as they related to me. Modesty aside, my hard work led my colleagues, like now retired Justice Antonio T. Carpio to exclaim, “Chief Justice Panganiban is undoubtedly the most prolific writer of the Court bar none” and another colleague, Justice Romeo C. Callejo to remark, “One book a year, and no case left undecided. This is Mr. Chief Justice Panganiban’s unsurpassed record. It is also the best summation of judicial reform,” and the Court en banc to pass a formal unanimous resolution acclaiming me, though unworthy, as the “Renaissance Jurist of the 21st Century.”

Indeed, I thought I would end my career with those unsolicited, heart-warming testimonials. In fact, I bought a small, 350-square-meter lot where I planned to build a small bungalow, and shopped for a two hectare farm in Tagaytay where I could grow a few plants and write my memoires. But lo, and behold, 13 years have passed since then, and my wife and I have not moved from our oversized 7-bedroom house in a 1,500 square meter lot in Makati, abandoned by our five children who have now built their own homes and who left my octogenarian wife and me alone in that rather large family home.

Why have I not retired from active work? Simply because right after my judicial term ended, I have been surprisingly offered to join several big conglomerates as an Independent Director and to serve several philanthropic and charitable foundations as an officer and trustee. Yes, after my retirement from the judicial Mt. Olympus, I have been asked to join again the race in the plains below where I enjoyed once more the perks of social life. I travel abroad at least five times a year on corporate meetings and tours of my favorite places in the world from Iceland and Alaska in the North to Chile and Capetown in the South.

And while I was preparing this and another speech I delivered a few weeks ago, I am reminded that I have spent almost 13 years in the corporate and philanthropic world after my retirement, almost two years more than my over 11 years in isolation in the Supreme Court. And precisely because I was not able to build that small bungalow and to till that small farm, I am able to keep up with the amazing races in science and technology, as well as to be abreast with the economic and business pivots reshaping our country and the world while keeping up with the latest judicial pronouncements and, at age 83, enjoying golf and tennis alternately almost every other day, except Sundays.

From that discussion on the fallacy of complete retirement from work, let me go to the macro level on what young people, like all of you, can look forward to. I think a faster-paced world awaits you because of the advent of the fifth generation technology or 5G in telecommunication which will have giant ripple effects in the life of everyone on earth. The Information Revolution has changed our lives, beginning with the founding of the Internet on October 29, 1969 at the University of California in Los Angeles, and the creation of new wealth that is sometimes invisible to the naked eye. Remember that the wealth created by millennial revolutionaries like Bill Gates, Steve Jobs, Jeff Bezos and Jack Ma can hardly be comprehended by our five senses, unlike the fortunes built by John Rockefeller, J. P. Morgan, Walt Disney or Thomas Edison which could be seen, or felt, or heard by the human senses to know that they surely exist and could be touched and heard physically without the help of artificial enhancers or technology.

But beyond the Internet and 5G will proliferate in the next five years the wonders of artificial intelligence, crypto currencies and the Internet of Things. And even beyond them also, those of you who are two generations younger than me, those who belong to Generation Z, will witness a revolution in health care that would easily make you live much longer than me, as much as 150 years, because you will have the advantage of growing your own replacement body parts through the marvels of stem cell technology and the conquest of the now-fatal diseases like cancer, heart failure, diabetes and physical disabilities. Indeed, you can grow, exchange or even trade-in spare hearts, spare limbs and spare brains.

In fact, some genetic engineers say that by 2045, death from disease will be “optional” and ageing will be reversed. Humans would no longer die from natural causes or illnesses. Advance medical knowledge will be able to eliminate dead cells from the body, repair damaged cells and regenerate new ones through stem cell replacements.

As you probably know, ageing is caused by the shortening of the “telomeres” of the chromosomes with the passage of time. But it is now possible in laboratory experiments not only to arrest the shortening but also to enhance the lengthening of these telomeres. Major tech companies like Google and Microsoft have started veering their sights to these amazing sciences which will occupy world attention within five years from now.

All these lead me to an old favorite joke of mine to end this talk. It is said that in the future, the brains of the dead would be sold and installed to replace those of the living. Publicly auctioned by Sotheby in London would be the preserved brains of Albert Einstein and of Alberto Estan, a Filipino who failed the bar exams three times in a row.  The auction started with $1,000 dollars for Einstein’s brain and $100,000 for Estan, the bar flunker. When a bidder asked why Einstein’s brain was much cheaper than the Estan’s, the auctioneer curtly replied: “Einstein’s brain is already overused while the bar flunker’s brain is almost new and underused.”

Thank you, ladies and gentlemen. May we all have underused brains so our heirs may inherit them and fill them up with wit and wisdom we missed in our own carefree lives listening to irreverent speeches and corny jokes like mine.









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