P-Noy told reporters covering his Canada state visit that he met with Sen. Grace Poe before he left. P-Noy said he wants someone with a high chance of winning to continue what he has started after he is out of Malacañang.

Sen. Grace confirmed what P-Noy said but added he didn’t tell her what position P-Noy would like her to run in 2016. Indeed, Sen. Grace said she is still trying to figure out in her mind whether her running could help address problems like pervasive poverty.

P-Noy is apparently getting worried about the inability of Sec. Mar to improve his rating. P-Noy is eager to prove to doubters and haters alike he still has endorsement power. Hindi pa siya laos.

He also needs a successor who will watch his back. He does not want to end up in the room next to his Ateneo economics teacher at the Veterans hospital.

P-Noy must feel he should be more pragmatic about who he endorses. Remember Tita Cory didn’t endorse the obvious party favorite, Monching Mitra but rather, FVR. That explains the verbal admonition to Mar to improve his ratings. Watch Mar launch an expensive campaign any time now with that objective.

In the meantime, P-Noy needed to talk to Sen. Grace and make her know he is considering her, just in case Mar remains hopeless. I think Sen. Grace, who is non-committal up to now, was also waiting for P-Noy to talk to her.

It is significant that Sen Grace was able to make P-Noy say that he is ready to endorse an independent, one who is not a member of the Liberal Party. The Liberals will just have to accept a Grace Poe candidacy over Mar to remain the party in power.

But just in time for Mar’s birthday, the Court of Appeals issued a freeze order on bank accounts of Jojo, his family and associates. With AMLC now in the picture, it is becoming ominous for Jojo. Remember how AMLC and the Ombudsman worked to pin then Chief Justice Corona during his impeachment hearing.

We don’t know how fast the Ombudsman will move on the cases. A reported adverse preliminary finding by an Ombudsman panel still needs to be validated by the Ombudsman herself, and proper cases filed at Sandiganbayan.

There are a number of serious legal issues that also have to be resolved before one can say Jojo’s presidential bid is compromised. There is the issue of whether Jojo can be sued by the Ombudsman while he is a sitting Vice President.

But even if the suits are filed at the Sandiganbayan, there is the presumption of innocence for Jojo. The mere filing of the charges may not be enough to bar him from running. If he can run, he can still win the election.

I guess Mar’s strategy is to blow Jojo out of the running as soon as possible. He might be thinking that without Jojo, the field is open even for someone like him. Without Jojo, P-Noy may be persuaded to cast his lot with him. Grace Poe could be persuaded to run as Mar’s vice president.

But I think they are underestimating Sen. Grace. The lady is smarter that those Liberal party machos. Sen. Grace knows she has the upper hand.

In the first place, unlike Mar, Sen. Grace does not think running for President now is a life and death proposition. She is open to it the way Obama, also a first term senator, was. She believes being President, as is often said, is destiny. And when destiny knocks, you have to be stupid to shoo it away.

I think Sen Grace is ready to run for President if P-Noy supports her. I don’t think she wants to run for Vice President. The VP can be ignored by the President. She knows she is more powerful and more visible as Chair of a major Senate Committee. It only makes sense to run for VP if you have reliable information that the Presidential front runner has serious health issues and may not last the six year term.

Still, the race could open up soon, depending on the Ombudsman. It also depends on the progress of any corruption case filed at the Sandiganbayan.

So far, Sen. Trillanes and company have done their demolition job as best as they can but, surveys show, without serious damage to Jojo’s candidacy. P-Noy won’t name his candidate until late next month and the deadline for candidates to file their candidacies with Comelec is still mid October.

If Jojo can’t run, Erap will. If Grace runs, Erap will likely support her. Imelda, now 85 years old, could die and make Bongbong do a Noynoy. So many things can happen yet. The excitement is just starting to unfold.

Power rates

Here is a reaction to our column last Monday on power rates, etc from reader RGomez:

Hi Boo,

Your recent column (Philippine Star, 11 May 2015) on the toughest Cabinet job was a realistic appreciation of the complexity of the Energy portfolio and, as usual, made a lot of sense.

I would like to go back to something you wrote a few months earlier, where you advocated that the drop in oil prices over the latter half of last year should be reflected in fuel and other oil-related prices. This, I thought, could indeed give a significant boost to the economy, and was an idea well worth pursuing.

Now, we should be well aware how high power rates obstruct investment and economic growth. But these power rates—including natural gas prices—tend to be indexed to the oil price. So the idea of reducing energy prices in line with the drop in oil prices could apply as well to power rates.

Has the government done anything to ensure that the massive drop in oil prices over the second half of 2014 has been reflected in a commensurate drop in power rates?

Take the Malampaya natural gas price. Is the Malampaya gas price set transparently and publicly for public scrutiny? How far does the Malampaya gas price now reflect the drop in oil prices?

“The price of the Malampaya gas is set in [a] 25-year long-term contract between the government and the Malampaya Shell consortium. The pricing formula is based on some base price that changes over the years as specified in the contract and adjusted by the US CPI, and the Oman, Dubai and Mean of Platts (MOPs) oil price indices. The Philippine price resulting from this formula for natural gas is said to be higher than those in Japan and the US.” (US AID, Challenges in Pricing Electric Power Services in Selected ASEAN Countries).

The first critical question is why was the Malampaya natural gas pricing formula set so high. Why should it even exceed natural gas prices in the US and Japan (which apparently has the highest imported gas price in the world)? Why should a struggling developing country like the Philippines pay higher gas prices than the most developed countries in the world?

Malampaya gas is domestically produced, not sourced from abroad such that it would need to be priced in line with a foreign source. The Malampaya gas price is a transfer price which appears to be geared to maximizing the profits of the Malampaya gas consortium, without consideration for the disastrous impact on downstream Philippine consumers and industries.

At the very least, Malampaya natural gas price should be set transparently and widely published for public scrutiny so that, as it were, it could be publicly defended “in Plaza Miranda” rather than manipulated in hidden backroom negotiations.

Consider further that power generation plants based on Malampaya natural gas just declared tremendous profit growth in 2014, at the time when oil prices were dropping by half. This is reported by Business World, First Gen reports 64 percent rise in 2014 profit.

That the gas-based power generation plants’ profits rose even as their revenues dropped implies their costs dropped tremendously—which only makes sense if their natural gas costs dropped correspondingly. The critical question: did First Gen pass on their natural gas price savings to consumers or did they capture those savings as profits? (I am told fuel price is a pass through for FGen –bchanco)

The same question may be asked about Meralco and National Grid Corporation: have they passed on price savings due to the oil price drop to their customers or did they capture those savings as profits?

Meralco’s power rates from 2013 to 2015 do not reflect any apparent price drops, suggesting that they captured any oil price savings as profits.

Another critical question: Will the government do anything to ensure that oil price savings in the power industry are passed on to consumers and industries? Or will government remain the captive of special interests?