Following through from the website of Filipinos in Christchurch, this is Part-3 of the series titled “The Day After-To Lure Them Back”. The hunger for more crude oil and its consumption as fuel for energy in the 20th and 21st centuries has been pushed largely by the incessant growth of all forms of mass transportation – planes, ships, rail and automobiles. The immediate outlook for demand still hints upwards. In the long term, uncertainties linger; the OPEC believes that the OECD countries will push for lower consumption policies at some point in the future; when that happens, it may curb oil sales. Yet, consider this: Peak Oil is the scientific projection that future petroleum production (whether for individual oil wells, entire oil fields, whole countries, or world wide production) will eventually peak and then decline at a similar rate to the rate of increase before the peak as these reserves are exhausted. The peak of oil discoveries was in 1965. Since then, oil production per year has surpassed oil discoveries every year since 1980. The International Energy Agency (IEA) says production of con ventional crude oil peaked in 2006. Since virtually all economic sectors in the world now rely heavily on petroleum, peak oil could lead to a partial or more likely, a comp lete failure of markets. In this part of the story, the author uses this eventuality to fashion another scenario – that most major oil-consuming countries would jump at the opportunity to rapidly switch to an alternative and uninterrupted source of energy to forestall or better, avoid a collapse in their economies sooner rather than later. As a result, it provides the main character of the story – the President of the Philippines, the wherewithal to rapidly reverse the Filipino Diaspora for good reason: national sur vival.
TO LURE THEM BACK
Towards the end of his announcement the President revealed the launching of a new programme designed to lure back OFWs in hope of reversing the Philippines’ growing brain drain. He declared that a new law would soon be passed in the next session of Congress.
The law would allow government to regularly access up to a half of the US$ 18.5-billion cash flow from inward remittances the country has been tradition ally receiving each year from Filipinos working and living abroad. These funds were needed to rapidly build the new deuterium-based power generation infra structure without relying on foreign-based borrowings.
To accomplish this, it would correspondingly float over the years a series of long-term government-guaranteed bonds denominated both in local and foreign currency. The yield on these bonds would be set at 1-1/2% above current market rates for similar instruments of indebtedness at time of issuance. It would also be tax-free (provided the holders were Filipinos) and could be bought either online or in special ‘counters’ that would be set up in the premises of all Philippine embassies and consulates around the world.
These investment instruments would also contain a feature allowing Filipino holders to convert the bonds after 10-years into preferred stock representing ownership of all the combined deuterium-based extraction-, processing-, and power-generating plants including the national and international grids. The nominal rate of return by way of dividends alone ascribed to this particular stock was estimated to be anywhere from 18- to 22% per annum and could possibly go higher as energy consumption rose to higher levels over time.
The blueprint for a new energy infrastructure development plan also called for all the integrated plants to be strategically situated on each of the three main island groups in Luzon, the Visayas and Mindanao along the same alignment of the Philippine Trench where deuterium was found in heavy concentrations.
The plan went even further because it would not only provide steady long-term employment in areas that were once deemed to be depressed where the integ rated plants would be built but also construction and development of new large business parks near those plant vicinities.
Apart from other incentives to attract tenants and workers, these parks would enjoy use of new ground infrastructure like air and sea ports, rail and road net works, bridges, and utilities with capacities large enough to support an influx of new commercial and residential developments that would be powered with ultra-fast fibre-based broadband connectivity.
All told, the new enclaves would be able to comfortably sustain a combined population of up to 43-million people (or 46.1% of the population of the country in 2010 at 93.26-million). Each new enclave could comfortably accommodate and sustain an average population size of 4-million. It was a brilliant answer towards decongesting Greater Metropolitan Manila (2011 population: 21.295-million) and the few other large urban centres in the country whose resources and services were now awfully inadequate and stretched beyond their limits.
SWEET ICING ON THE CAKE
There was also some sweet icing on the cake. The President revealed that when the country’s deuterium-based power level supplying the national grid reaches at least 67% of the total, it would introduce a concessional price per kilowatt fixed at a half the traditional cost for as long as the deuterium supply lasts, which was conservatively estimated to be about 473-years even at 12% growth rates of consumption. All these moves were seen as allowing the Philippines’ to achieve annual GDP growth rates of about 20% per annum by 2020.
Then the Pièce de résistance or the best part or feature of the overall plan that no one saw coming, came. International economists revealed at about the same time that because of the humongous level of revenues that a debt-free Philip pines would be earning sustainably for hundreds of years, its currency would rapidly be revalued upwards at or near par against the leading reserve and trading currencies of the world like the U.S. Dollar. At parity at least, the pur chasing power of Philippine-based businesses, consumers, employees and house holds would undoubtedly match (and probably eventually exceed) those of the top 5 richest countries of the world.
Was it a realistic forecast? Most analysts in major financial centres around the world seemed to agree largely because the Super Fund that the President announced was essentially structured to receive and contain up to 87% of all revenues generated from sales to national and international consumers of deuterium-based energy production. And as we shall discover shortly, this ‘pot of gold’ would be insulated and kept away from the hands of any public or private parties attempting to ‘raid the treasury’ with ‘creative ideas or schemes’ on how best to use it.
What effect would a revalued ‘at par level’ Philipine Peso suggest? Simply, Filipinos working in other countries would be earning the same wage value (in terms of purchase power) for the same job or set of skills if that job was situated instead in the Philippines. It was a potent and irresistible incentive for all OFWs to return and contribute once more to the nation-building effort.
All these moves even went further as the President and his team of advisors had other ideas. For one, certain amounts received from consumers of this new energy would in turn become part of seed money for a national fund (i.e., the Philippine Posterity for Future Generations Fund) set up specifically to accel erate social and economic development.
The fundamental objectives of this Fund were principally for the elimination poverty and hunger; access to suitable and affordable housing; improvement in the quality of education and reduction of its costs; creation of even more employ ment opportunities across-the-board; providing subsidies for a broad spectrum of healthcare for the entire population; providing retirement and other subsidies for elderly, handicapped and disabled citizens; and, protecting the natural environment within and around the Philippines in all its forms.
The new Fund would be managed through a newly-created semi-autonomous division of the Bangko Sentral ng Pilipinas whose charter prescribes it as being an independent monetary entity enjoying both fiscal and administrative auto nomy devoid of any interference from the Philippine government or the private sector. What’s more, the Fund’s own charter and the provisions of its corres ponding Deed of Trust makes it impossible to use any part of the Fund as collateral in any form, manner or subs tance to secure the the borrowing of money.
Neither would it be able to lend monies unless full collateral assets of higher value are secured and doing so would still require the scrutiny and approval of the independent Monetary Board sitting en banc. This ‘gate-valve’ mechanism would also apply to all its investible funds and other application of funds for new social and development programmes above US$ 175,000. Its use would adhere to strict guidelines reflecting the principles set for creating it in the first instance. These guidelines would also be enshrined into a special law – one that would require a unanimous vote of both chambers of the Congress of the Philippines to amend or repeal it. The President of the Philippines, whether the current or a future one, would also exercise the power of veto in case such a Congress ‘manages’ to attain unanimous vote for the purpose.
Later, the Fund’s principal or equity value levels would be increased and aug mented to a large extent by additional inflows generated from sale of power to third-party countries some of whom had already initially signed up for 15-year renewable contracts for concessionally-priced and guaranteed energy supply service.
Combined, these contracts were valued over their life at an astonishing US$ 6.35-trillion! What’s more, the Philippine government had already received cash-based down-payments on these contracts representing 10.25% of their first year’s total supply value. By the stroke of a pen, as a leading Filipino economist mused, the country’s external debt of about US$ 62.43-billion (as of September 2011) could easily be repaid in full in a matter of just a year and a half!
All told, it was an ambitious set of plans set in place and financed by what see mingly would be a very deep and wide pocket. What’s more, this was a different Philippine President altogether – one steeped with knowledge about the tumul tuous history of his country and how much its people had suffered over the centuries.
It was his understanding that since the dawn of mankind, control (and therefore, power) had more often than not been gained by force, violence or deceit. As an innate property of man, it was not surprising. But it was rare to find leaders who, at the very core of their hearts, had the best interests of their people in mind. He would be one of them.
What’s more, he believed that failing to understand the symbiotic nature of vir tually everything and everyone on the planet could lead to mankind’s sooner extinction. That included the people he was now serving as the top official of the land. He saw the connection of deuterium-based energy in this fundamental observation – that by being a leader of a small country now blessed with a rare opportunity to provide the means to realize his people’s aspirations, he could perhaps also use it to set an example for the rest of the world and perhaps change it for the better.