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THE
planned energy summit should not be—as one lawmaker put
it—just Malacañang talking to itself, but a real one to
take up proposals to prepare the country for worse times
and craft doable measures that can quickly ease the
public pain from rising oil prices.
Among the measures raised are suspending
the VAT on fuel, getting the government in the lead on
energy savings, putting the public-transport system in
order such as reducing in lean passenger hours the
practically empty public vehicles that keep plying their
routes, and discount coupons for public-utility
vehicles.
The lively public discussion on the
problem was very evident on Wednesday when senators
raised the question of whether the 1-percent oil tariff
reduction was just for show and hardly touched fuel pump
prices.
The lawmakers showed the faulty math
beneath government calculations on the tariff cut that
showed it would be “revenue-neutral” while, the
government said, the oil E-VAT suspension that senators
are pushing will cost the government so much more and
prevent it from providing services to people.
Sen. Francis Escudero said the
government likely erred—if not downright calculated the
costs for show—in adopting a lower trigger for
completely scrapping the 3-percent oil tariff that under
President Arroyo’s order would only be zero-rated if
Dubai crude hits $106 a barrel.
He added that if Malacañang’s motive in
reducing the tariff on oil is to signal the President’s
concern on rising oil prices, “then it clearly fell
short of its target, because a 1-percent cut, by any
standard, is unalloyed tokenism. The math on oil would
show that forgone revenues from the complete scrapping
of the tariff on oil will be recouped by the government
from the windfall in VAT she so dearly loves.”
The government’s P54-billion projected
take from the E-VAT on crude oil and finished petroleum
products, according to Escudero, was premised on an
average $66 price a barrel of Dubai crude—when the rate
is now hovering at $93 per barrel.
He explained that while the revenue
forecast was anchored on a higher P46 to P48 to the
dollar exchange at which rates the government would be
right in its calculations, the rise in oil prices has,
however, outpaced the surge of the peso that is now on
the verge of breaching the P40 to the dollar rate.
He thus estimated that the real figures
are more like these: every $10-increase on the price of
oil would increase E-VAT and tariff collection by P6.2
billion a year, based on a P41:$1 rate and 276,500
barrels a day consumption. “In the end, the government
is a winner. Its bottom line is secure.”
Other opposition and administration
senators suggested, on the other hand, that Malacañang
should have kept an open mind on proposals to scrap the
E-VAT on oil. On this, Escudero indicated that at the
very least, the Palace should consider adopting a
“sliding E-VAT rate for oil” that would ordain lower VAT
rates when oil prices are on the rise.
“Malacañang’s intransigence on this
matter shows that the much-ballyhooed oil summit is all
for show. It will be a scripted monologue because the
government will only be talking to itself,” said
Escudero as he advised the President to “start thinking
outside of the barrel if she so desires to provide an
act of solidarity with the people who are reeling from
expensive oil.”
Sen. Mar Roxas, who has been pushing for
the oil E-VAT’s suspension, recommended that the
government exert extra effort to increase its
tax-collection efficiency before shunning Senate
proposals. “First of all, the government can make the
collections much more efficient. Second, why are they
passing on to us the problem of their ineffectivity,
their inability to perform their duty?”
In effect, he said, state agencies are
saying “they can’t do their task and [have to] keep
collecting VAT on oil products. Let’s turn this equation
a bit: Do your job well, give back to us our money,
because we need it at this time.”
Roxas argued that the government’s
fiscal conditions have so improved in the past four
years that it could effectively deal with the impact of
P20-billion forgone revenue in suspending the VAT on
petroleum products for six months.
“The sickness of the economy four years
ago was fiscal crisis, and we solved this with the VAT.
Now, the economy and the circumstances in the world have
changed. To keep applying the same cure to a sickness
that is no longer present is wrong policy. The present
sickness is the very, very high cost of living,
principally brought about by $100 oil per barrel,” he
said.
Roxas further tried to show the penny ante
thinking of the administration, noting that the economy
is now in excess of about P5 trillion. “The government’s
budget is P1.3 trillion. We’re looking at budget
equality, with no deficit this year. So P20-P30 billion
is nothing in the bigger scheme of things.”
Roxas said by removing for a time the
VAT on oil, “in effect, we [would be] pump[ing] P4 with
each liter of diesel, P65 with each 11-kilo LPG tank,
back into the economy, and give our people much-needed
relief.”
The IBON independent think-tank has a
similar take on the matter. It believes the oil tariff
cut has not only failed to address high pump prices, but
that the Arroyo government has “defaulted on its
responsibility to collect revenues, all in favor of the
oil companies.”
IBON executive editor Rosario Bella
Guzman said, “by choosing to remove tariffs on oil
imports as a solution to high oil prices, the government
is protecting the interests of the oil firms at the
expense of potential revenues that should be used to
fund vital social services such as health and
education.”
A more effective solution to the problem
of high oil prices would be the lifting of VAT on oil
products, she said in clear agreement with the senators.
Guzman said, however, the “only
permanent solution to high oil prices is nationalization
of the local oil industry, starting with the repeal of
the oil deregulation law. The oil industry is vital to
the country’s economic development, and as such should
be regulated by the government.”
Other suggestions from senators include
President Arroyo directly facing the oil shock problem
from the demand side by making the government the leader
by example in energy conservation, by easing traffic in
cities because gridlock adds up to the national oil
bill, by calling for surcharges on gas-guzzling luxury
cars, and by tapping renewable sources of energy that
will displace fossil fuel.
On alternative energy sources, Sen.
Loren Legarda prodded the President to fast-track the
government’s commitment to reduce Philippine dependence
on imported oil, and also lamented the oil tariff
reduction was not enough and could not be expected to
bring down pump-level fuel prices.
Administration Sen. Miguel Zubiri agreed
with Senate colleagues the 1-percent oil tariff cut was
not enough, adding he supports Senate initiatives to
suspend the E-VAT on oil which, he computed, could mean
a discount of P5 to P6 per liter.
“My proposal is to permanently remove
it,” he said citing a pending bill he earlier filed to
exempt fuel and electricity from the E-VAT.
Sen. Panfilo Lacson proposed fuel
discount coupons for public utility drivers so the
maximum effect of the tariff cut will benefit only those
who need it most.
Similarly, he called on the National
Police leadership to intensify efforts to curb kotong
and other extortion activities that usually victimize
lowly drivers and transport operators.
Lacson also asked the LTFRB to run
against colorum bus operators, and terminate once and
for all their continued illegal operations. “We have a
glut of empty buses running in our streets, wasting
fuel, causing heavy traffic that in turn wastes more
fuel, simply because the DOTC is unable to implement the
law properly.” --B. Fernandez |
