|
THE
Arroyo administration wants to convene an energy summit
to discuss ways to cushion the impact of the record rise
of world oil prices on the local Philippine economy. But
from where we stand, the priority now should be taking
immediate steps to address the energy crunch, rather
than talking about it, and the first step should be for
Malacañang to seriously consider the various proposals
to reduce, suspend for at least six months or scrap
altogether the 12-percent tax on petroleum.
With oil
prices in the
United States
breaching the key psychological barrier of $100 a barrel
for the first time on Thursday, it is true that the
country faces the dire prospect of an oil-price surge
that could have an adverse impact on the daily lives of
ordinary folk and on economic growth as a whole.
The
country’s economic growth may slow down to 5.7 percent
from the official 2008 full-year forecast of 6.3 percent
to 7 percent if crude-oil prices continue to hit record
highs, according to Acting Socioeconomic Planning
Secretary Augusto Santos.
This
year’s inflation target range of 3.9 percent to 4.1
percent could also increase to 4.8 percent.
Santos says this already takes into account the government’s
package of mitigating measures, including a possible
reduction in oil tariffs, in the figures.
“We’ll
still grow and still be able to contain inflation. But
this is the market at work. The price of oil is
something we can hardly control and we’ll just have to
live with it,” he said.
President Arroyo’s instruction to Energy Secretary
Angelo Reyes to call a summit of energy stakeholders “to
enhance policies and programs, attract investments in
technology [and] launch development projects that would
impact favorably on energy supplies and prices while
helping significantly arrest climate change” is a
laudable move, but the more urgent thing to do now is to
put in place a concrete program of action for dealing
with the spiraling price of oil.
Sen.
Francis Escudero has a point in saying that the summit
might not accomplish anything other than highlight the
ignorance and incompetence of energy officials. Instead,
the government should enforce any of the drastic—but at
least doable and mitigating—measures already put on the
table by various parties, including the review of the
oil-deregulation law, removing the value-added tax on
oil and oil products, lowering tariff, and reimposing
price ceilings and prohibiting price manipulation, in
addition to increasing spending on research and
development to find alternate and indigenous sources of
energy.
Sens.
Manuel Roxas II and Juan Miguel Zubiri have already
proposed the scrapping of the E-VAT on oil and other
petroleum products even just temporarily, saying it
would be better to let the people spend less on fuel.
The
rationale for the suspension of the oil tax for at least
six months, according to Roxas, is to give consumers
some relief.
“These
are not ordinary times that call for extraordinary
measures. $100 per barrel is not normal. . . . The oil
tax is good for the economy when oil was still at $30
per barrel, but at $100 the oil tax is not good for the
people,” he said.
He is
right in saying the government should protect the
people’s welfare first and foremost, but the E-VAT
suspension, as noted earlier in this space, also
requires a quick study at the very least, as any measure
that might entail legal and administrative complications
would.
We
understand that several proposals on how to mitigate the
impact of the rising fuel prices on all sectors have
already been discussed in the Cabinet, including the
suggestion to temporarily suspend the collection of
E-VAT on petroleum products.
Initial
discussions in the Cabinet indicate that Finance
Secretary Margarito Teves wants to reduce the tariff on
oil instead of the proposed suspension of the collection
of VAT on petroleum products because of the huge revenue
implications. Teves has also proposed that a special
fund be set aside for the use of the sectors affected by
the increases in fuel prices.
Given
all these preliminary discussions and proposals,
therefore, the planned summit could be a waste of time
and effort because the government is already
implementing a number of programs aimed at mitigating
the impact of rising oil prices. Among these are
facilitating the shift from imported fuel to indigenous
sources for power generation, carrying out energy
conservation and efficiency measures, and reviewing the
books of oil companies in order to ensure that the
market prices they dictate are reasonable.
Apart
from these, the government has also encouraged the
transport sector to gradually shift from the use of
fossil fuels to biofuels. These are all steps in the
right direction, and what needs to be done is to make
sure these are indeed carried out and not stuck in
rhetoric and press releases.
The
record-high oil prices in
New York
last week spell bad news for countries, including the
Philippines, that import most of their fuel
requirements. While the US Department of Energy believes
that high oil prices will taper off in the coming months
as demand is expected to ease with the projected slower
economic growth in the US, it also predicts the average
price of crude oil this year to be well above the
average price of about $72 per barrel seen in 2007.
Given
this situation, it nevertheless makes sense for the
government to take concrete measures to tackle the
problem. But we need less talk, and more action, as the
nation confronts yet another energy crunch. |
