Press Release
August 25, 2011

Transcript of Sen. Serge Osmena's ambush interview after the PNP Choppers Scam Hearing

On the PNP Choppers Scam

Serge: Hinahanap pa namin iyong second payment na $1 million. Sapagkat ang nakuha lang namin ay iyong down payment na $500,000. Iyan sinasabi po nila ay lease po iyan. Napakalaki naman ng lease na iyan. You can buy 2 brand new helicopters with that $500k. But they bought 5, so they have to pay an additional $1M. Sasabihin nila, lease din po iyan. Brand new binili tapos sasabihin nila lease lang.

What is very telling is, iyong pinirmahan ni Rene Sia (of Lion Air), he only signed it in 2007 or 2008, pinadala lang sa opisina niya, pahabol lang. He was not with Lion Air in 2004, when he supposedly signed the lease contract. So how was it possible for Rene Sia to validate that indeed it was a lease? He was not even working for Lion Air.

Q: Rowena Del Rosario said she did not know if they paid the 7.5% tax?

Serge: Alam mo, 'pag naiipit sila ang response ni Rowena ay, 'hindi ko alam' o kaya 'hindi ko matandaan.' It was clearly a very evasive type of behavior.

Gusto ko din sabihin that I respectfully disagree with the Chair (Sen. TG) and Senate President Enrile that our PNP is disjointed. Because I think they have deliberately covered-up (this controversy). They were very efficient at the cover-up.

Q: Do you think (former DILG and Napolcom Chairman Sec. Ronaldo) Puno was used here as a dummy?

Serge: :Yes, I think he has some type of command responsibility spagkat siya ang chairman ng Napolcom, siya ang secretary ng DILG. As a matter of fact, he was caught telling half-truths kanina. He said he ran with the opposition in 2004, he said he was a candidate of the Liberal Party. I told him the Liberal Party was aligned with Gloria Macapagal-Arroyo, with Kampi and with Lakas in 2004. Sa kabila ho kami ni FPJ. He corrected himself right away. He seems like a facility for bending the truth.

Q: Rowena del Rosario was not a CPA...up to what extent iyon sa integrity ng LTA accounts, dun sa bookkeeping niya for LTA?

Serge: The answer to that is, she was never fired. So she must have been pretty good at her job (Laughter) She only said she resigned recently, when she had to testify.

Q: Assuming na iyong tax cases being prepared against the Arroyos and they present evidence to support their claim...Del Rosario cannot testify against them, they can get away?

Serge: If Iggy and Mike will show enough income to support the $500 down and the $1million afterwards, they will be able to get away with it.

Q: How much is the government spending for these investigations?

Serge: I don't know. We use the Senate budget, the lights, the food. The budget of the Blue Ribbon committee, we are not coordinating with the DOJ and the other investigating agencies of the government. It just so happens that now people are willing to talk because she is no longer the president. Alam po naman ng taumbayan na talagang grabe ang pagka-corrupt nitong former administration that is why Noynoy is getting a lot of support because of her anti-corruption campaign.

Marami sa mga expenses ay fixed. We have a staff. Now they are working on this instead of other matters. The Blue Ribbon is really tasked to investigate. They can do it even without Senate resolution, ex parte they can investigate any malfeasance, misfeasance, any government official. And he is doing his job very well.

(Ambush Part 2)

On the proposed hike in power rates

Q: Any comment on the reported P5/kwh increase being heard before the ERC?

Serge: P5/kwh?!?! No way. That's the grid rate now. They're not gonna double it, will they? They'll gonna have a revolution in their arms.

Q: Marami daw petitions ang PSALM?

Serge: No, the one of PSALM is supposed to be 39 centavos per kilowatt hour and iyong sa FIT, 11 centavos per kilowatt hour. That's 50 centavos. That's too much.

Q: Considering na tayo na ang may pinakamataas na rate? So hindi kelangan na pagbigyan ng ERC ang mga petitions na iyan?

Serge: No. But if it is justified, then there's nothing we can do. Pero bakit ba nagkaroon ulit ng malaking utang iyang PSALM? We're going to investigate that in the JCPC. Kasalanan iyan ng previous administration.

Q: Bakit nangungutang ang PSALM eh di ba dpat nangongolekta siya ng... (Cut short)...

Serge: Because Gloria ordered them to sell power at below cost to be popular. Unang-una sa lahat, ang nabenta ng PSALM noong 2005, 2006, 2007, were the good plants, the efficient plants. Ang naiwan sa kanila ay iyong mga dispalinghado, iyong mga inefficient. Panahon pa ni mahoma. So mas mahal po ang production cost nila, ang operating cost, like Sucat, like Malaya. So Gloria ordered them to sell at below cost kaya lumaki ang utang ng PSALM. Kung ang cost ay P5, inorder sila ni Gloria na ibenta lang ng P2, lumaki na naman ang utang ng PSALM.

Q: Hindi dahil palpak ang EPIRA law kaya mataas ang singil ng kuryente?

Serge: I wish those who are saying that would like to debate us. Because the EPIRA is a good law. The government did not have to put up any more money to build new plants. It's the private sector that's doing it. Noon, we will run short because the government did not build enough plants. Nagkaroon tayo ng brownouts, blackouts noong 1991, 1992. Ang daming nagmumura noon sa government. 8 hours ang brownout everyday. We don't have that anymore because of the EPIRA. It's not working well because nasabotahe ng previous administration. They did not let the market to be the one to determine, they were fixing the rates and making them lower. Hindi pumayag tuloy ang mga bagong players na pumasok. Eh tingnan mo naman, ang gobyerno naman ang nagfi-fix ng rate. That is why we want government out of power production to open the competition. Halimbawa, nasa jeepney business tayo. Ikaw may 5 na jeepney, ako may 5 na jeepney, ikaw gusto mong pumasok sa jeepney industry. Eh ikaw naman subsidized ka naman ng daddy mo. Eh di ayaw ko na mag-compete kasi mayaman ang daddy mo. That's the same. If we're paying P40 for diesel and daddy is paying only P20, eh di subsidized ka. Patay na ako. Hindi talaga ako papasok kung ganon kasi patay na ako. Malulugi talaga ako. That's why we wanted government to be out of the competitive sector, iyong generating, para papasok ang mga investors. Ganon ang nangyayari ngayon sa Mindanao. Because government still produces about 55% of the power in Mindanao. Kaya walang gustong pumasok doon.

Q: Kung payagan iyong mga pending petition for power rate increase?

Serge: Meron akong way out diyan. Sapagkat the government collects about P25B to P30B in royalties from Malampaya every year. I have been saying this for 10 years already but people don't understand me. Napakalaki po ng royalties from Malampaya. It is cheaper to import natural gas from Indonesia, Brunei or from Thailand than to use our own natural gas. Because from our own natural gas, we are paying about P1.40 in royalties, out of a total cost of P4. P1.40 goes to the government. If we import natural gas, we will only pay 22 centavos in the equivalent of per kilowatt hour. Coal is about 17 centavos, fuel is about 25 centavos. But the cost of our own, we are charging the people P1.40/kwh.

Ngayon, ayaw isoli ng administration, even the PNOY administration, itong royalty because that's P30B. Because it does not want to raise taxes. But that's a form of tax. We are charging our generating cost so high. P1.40/kwh is so high. If you're using only 100 kilowatt hours a month, you're paying P140 more. That's a month. If you have a little barong-barong na 100 kwh ang consumption...

Q: Kelangan pa iyan gawan ng batas?

Serge: We have here. I have already held hearings at the Senate. But when I talked to...ang sabi nila, 'huwag muna.' Ginagamit pa nila.

Q: Malacanang ang ayaw?

Serge: Yes. Because they will lose P30 billion in revenues. So my proposal now is this. We are going to raise the rates for the Filipino people by 39 plus 11, equals 50 centavos. I-cover mo na lang iyan sa natural gas. Because you are not really supposed to be receiving that kind of royalty. Nagkataon lang na (former Pres. Fidel) Ramos agreed in 1992 when he signed the contract with Shell-Malampaya, and it was supposed to give Shell a recovery period of 7 years, accelerated recovery. Nung nabawi na ng Shell, ayaw ng itigil ng gobyerno. That's what I want to cover the 50 centavos/kwh. Covered na covered iyan.

Q: Kung walang royalty, ano pa pakinabang ng government sa Malampaya?

Serge: Meron pang income tax. If they want, they can lower the royalty from P1.40 to 20 centavos/kwh para even sa imported. Don't make our own natural gas more expensive than imported gas. Bibili na lang ako ng imported. Nobody will be encouraged to explore for natural gas here, or for oil, if that's our tax structure.

Q: All efforts to lower power rates, parang walang nangyayari?

Serge: That's the bill I am hearing, the Natural Gas Royalty bill.

Q: May humaharang ba sir?

Serge: Hindi hinaharang. But I know that if I passed it, the President will not sign it anyway. I am trying to find a way to make the president sign it when we pass it. Atsaka hindi papasa sa House.

Q: Bakit sir?

Serge: (Shrugs shoulder). Orchestrated iyan eh. (Laughs)

Serge: Let me tell you this. When we passed the EPIRA in 2001 July, the international prices for a barrel of oil was around $17 to $20, that's the Saudi Arabian light crude, the West Texas Immediate Number 11, Brent oil, etc. Recently, it hit $120/barrel, now it dropped to $85 because of the European problem. So nagkaroon ng rise ng 4 or 6 times. At the time, the cost of our electricity rates was about, generation rate, was about P2.20-P2.40/kwh. Ngayon umaabot na about P4.50 grid rates. It doubled. So it's not fair to say that the EPIRA caused it to go up. Talagang tumataas ang cost ng fuel eh. Even coal, our natural gas is tied to the price of international crude. That's the way all contracts are signed. So tumataas ang natural gas din natin, kaya pag tumaas ang oil, tataas din ang natural gas price natin.

Serge: Another thing we have to remember is that before, we were already the second highest in Asia 10 years ago. Now, Japan is subsidized. Tokyo Electric Power is practically 50% owned by Japan. Korean Electric Power is 100% owned by the Korean government. Thailand subsidizes its power industry. Even Malaysia and Indonesia, 0 royalty in their own. You know, one of the big candy manufacturers here moved his candies to Thailand in 2004. And I said, 'Bakit naman?' and he said, 'Serge: , they're offering me P2/kwh in power rates. Here I am paying P4 already. So why will I not transfer there? I'll just ship my candy here.' And he did. He makes his candy there and just ships it here. Mas mura. Talagang there's a concerted effort for governments to attract the industry to subsidize industry. Wala tayong magagawa dun.

Q: Sabi ni PNOY kami ang Boss niya pero bakit hinaharang niya ang makakabuti sa mga electric consumers?

Serge: He will say, kawawa din naman because they will have to raise other forms of taxes to cover that P30B they will lose in the budget.


Q: Papalitan na daw si Customs Commissioner Alvarez...anong assessment mo sa ginagawa ni Alvarez?

Serge: Hindi mukhang okay because PNOY is changing him. I think the last straw was the missing 2,000 containers, medyo malaka ata iyon. Sabi ko nga, ang laki nun ah. Hindi ko alam kung anong nangyari because we have not looked into it. But still, that's his responsibility.

Q: Hindi pa siya nagre-resign pero may indications na iba na ang ilalagay. Shouldn't he just resign?

Serge: Hindi ko alang kung ano ang mga internal arrangements nila diyan. Because Alvarez belongs to the group of Balay...

Q: Kung si Ruffy Biazon ang ilagay?

Serge: I don't know. You need to really have good administrative abilities. I have not seen Ruffy...he has been a good legislator, but I have not seen him...It's not fair for me to judge kung kaya o hindi kaya. All I am saying is that I have not seen him perform yet in any administrative position. And Customs really needs a good administrator.

Malaking challenge ito kay Ruffy. But he is very intelligent, and honest and matapang. Kaya tingan natin.

Q: Kelangan matapang na Customs commissioner?

Serge: Pwede. Kasi maraming threats ang aabot sa buhay niya. Huhulihin mo ang shipment na $2M...


Q: Ang Robinson ba nagpapa-rent/lease?

Serge: No. Nagbebenta iyon.

Q: Eh bakit sabi rental?

Serge: You know, when you start lying, it catches up with you. So Iggy, this is the first time that he heard of it. Sinabi lang sa kanya, 'Tago mo ito para sa akin.' Una sabi niya, he leased from Robinson. Eh mali iyon because Robinson does not lease helicopters, they sell. Number 2, nagpapirma ng signature page for a supposed lease with LionAir. Unfortunately, the lease was signed in 2008. And the one who signed for Lion Air was Rene Sia, who was the GM in 2008. But he was not working for Lion Air in 2004. So how can he sign it?

Q: May iba pang script?

Serge: Maganda dito iyong kay Gen. Mosqueda and Mely Sorra. Sinabi nila na dumating iyong 2 lawyers ni Mike Arroyo and told the PNP Handwriting and Analysis Expert to validate that it was not Mike Arroyo's signature, that it was Iggy's signature, Iggy's handwriting. So, huli sila.

Q: Inconclusive daw?

Serge: Hindi. Mely was just fooling around with us. She was trying to back track now. Sasabihin Halimbawa, sasabihin ko kay Bote, pirmahan mo ito, then I will bring Bote here and he will sign and you will say it's the same. Siyempre, sasabihin mo it's the same. They should have used the signature in the check, the questioned document. Hindi nila ginamit iyon.

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