Book of Abstracts: 20 January 2014 Paliwanagan sa UP Diliman | Page 16

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SURP will be a center of excellence for learning and research in the
development of innovative theories, tools, and sustainable practices in
urban, rural, and regional planning adapted to developing countries. (Source:
http://surp.ph/about-surp/history/)

PRICING IN REGULATED INDUSTRIES WATER, POWER AND TELECOM
Ben Paul B. Gutierrez
Elementary economics tells us that prices are set using the laws of demand
and supply. This is true unless there are market imperfections (such as
barriers to entry) that inhibit competition and potentially cause harm to
consumers in the form of unreasonable prices or artificially-restricted supplies
of goods and services.
In sectors where competition is hampered because of, say, the existence of
significant economies of scale, regulation has to take the place of market
forces in ensuring reasonable prices. This is the case for water and electricity
distribution and transmission services, where regulatory agencies prescribe
the methodology for determining, and also approve, the rates charged to
consumers. However, the telecom sector is not governed by a regulatory
framework in setting tariff rates that are comparable to those in water
distribution and power transmission and distribution. The telecom regulator,
National Telecommunication Commission, still has to come up with measures
on how to operationalize what are “fair and reasonable” rates and tariffs and
a “fair return on investments”.
Three studies on pricing in regulated industries were completed at the UP
Virata School of Business in July 2013 by Dr. Daniel Vincent H. Borja and Dr.
Lorna I. Paredes for water distribution, Dr. Arthur S. Cayanan and Dr. Ivy D.C.
Suan for telecommunication services, and Dr. Helena Agnes S. Valderrama
and Dr. Mia P. Rey for electricity distribution. The studies are highly relevant in
light of the issues and controversies that continue to affect these sectors as
well as the need to ensure the sustained, efficient, and reasonably priced
delivery of these vital public services to all Filipinos.

became an issue co-editor of the latter. He was a Visiting Research Fellow of the
University of New South Wales in Australia (2009-2012) and Visiting Exchange
Professor of St. Norbert College at De Pere, Wisconsin, USA (2003).
Dr. Gutierrez earned his doctorate degree in Business Administration from Victoria
University of Technology, Melbourne, Australia and MBA and Chemical Engineering
degrees from the University of the Philippines Diliman. Before joining UP in 1998, Dr.
Gutierrez had almost 10 years of work experience as packaging specialist of two
multinational corporations, Colgate-Palmolive Philippines, Inc. and Avon Philippines
Manufacturing, Inc.
About the Virata School of Business
The Cesar E.A. Virata School of Business (VSB) of the University of the Philippines
Diliman, formerly known as the UP College of Business Administration (CBA), was
established in 1916. It has since been the leader in management education in the
Philippines, not because it is the oldest academic institution in management but because
of its continuing pursuit of academic excellence.
The VSB offers degree programs at the graduate and undergraduate levels. The PhD
program aims to train those who wish to be educators in the management area. The
PhD graduate is capable of engaging in academic research that advances knowledge
in the management field. The MBA program seeks to endow students with advanced
management skills while the MS Finance program exposes the student to a series of
courses that strike a balance between financial theory and practice. The
undergraduate program awards Bachelor of Science degrees in Business
Administration (BSBA) and in Business Administration and Accountancy (BSBAA).
On 12 April 2013, the Board of Regents approved the renaming of CBA in honor of
former Secretary of Finance and Prime Minister of the Philippines Cesar E.A. Virata.
(Source: http://cba.upd.edu.p