Granting, revoking franchises used as political tool in PH

MANILA – It may not be anything new, but under the Duterte administration, the granting and cancellation of franchises has become a hot political issue.

Consider the following:

  • President Duterte has on several occasions threatened to have the franchise of the country’s biggest media organization – ABS-CBN – cancelled due to what he says was its failure to air his ads during the 2016 presidential elections;
  • The granting of a franchise for the country’s third telecommunications company has been met by accusations that rules were bent or altered to favor a small Davao-based company owned by a friend of the president. That company had bested much bigger telcos, including top 100 corporation PT&T;
  • In Iloilo City, the franchise of the power distribution company that had been operating for almost a century was practically set aside in favor of a new company whose owners are known allies of Speaker Gloria Macapagal Arroyo.

While the House of Representatives and the Senate have the sole power to grant, extend or shut down franchises, the enabling law to do any such acts must be approved by the president.

Earlier this month, Mr. Duterte repeated his accusations that ABS-CBN had failed to air his ads during the presidential campaign despite having already paid for those ads.

Since his election two years ago, the president has constantly threatened to scrap the Lopez family’s franchise.

Speaking in the vernacular earlier this month, he told ABS-CBN, “Your franchise will end. You know why? (Because) you are thieves.”

The franchise of the media giant expires in 2020, well within the six-year term of the president.

Meanwhile, during this week’s ongoing Senate hearings on the proposed third telco, fears were raised that China would take control of the country’s key telecoms industry.

The Mislatel consortium had won the bid to challenge the duopoly of Globe and PLDT/Smart. Mislatel is 40 percent owned by China Telecom, 35 percent by Udenna Corp. and  25 percent by Chelsea Logistics. The latter two companies are owned by Davao businessman and Duterte ally Dennis Uy.

Many things do not seem right about the awarding of the franchise to a little known businessman who happened to be one of the biggest donors of Mr. Duterte’s campaign, said Senator Leila de Lima.

She added that “alarm bells are ringing loud” over Uy’s gobbling up of government contracts.

Besides PT&T, Mislatel bested telecoms firms owned by brown taipan Manny Villar as well as politician-businessman ChavitSingson.

In another development, In the Visayas island of Panay, critics have been questioning why the 95-year-old Panay Electric Co. (PECO) had its franchise practically revoked in favor or Monte Oro Resoursesand  Energy, Inc. (More).

In a visit to Iloilo City, Philippine News met with consumers who said they were uneasy with a company with no experience in power distribution taking over the franchise of PECO.

They also questioned why the franchise application of More was seemingly fast-tracked in the House, which at the same time sat on the franchise renewal of PECO.

More is owned by casino and ports magnate Enrique Razon, who is said to maintain close ties with Speaker Arroyo, whose husband, former first gentleman Mike Arroyo, is from Iloilo.

In all three cases involving the granting or revoking of franchises, powerful  government officials are flexing their political muscle, sending the message that it pays to be friendly to the administration.