HOPING the government will realize that the permanent or temporary removal of the 12-percent value-added tax on petroleum products spell big relief to consumers, Sen. Mar  Roxas II expressed optimism on Tuesday that the energy summit called by Malacañang will tackle his proposal to temporarily suspend the collection of VAT on oil products for at least six month.

“It’s the job of the government to reassess or change solutions when facts change. It’s foolish not to change medicines when the infection has already morphed into something else,” Roxas said at the 11th Foreign Correspondents Association of the Philippines (Focap) Conference on the Prospects for the Philippines.

In a separate development, the Bagong Alyansang Makabayan lamented that the administration is more inclined to listen to the “advice” of the International Monetary Fund than Filipinos. It noted an IMF paper cited this week, warning the government that a VAT suspension is “ill-advised” and will benefit the rich more than the poor because the rich spend a bigger proportion of their money on gas. Bayan said the IMF considered only direct spending on petroleum, and not the domino effect of every increase in oil prices.

At the Focap, Roxas said he opposed imposing a VAT on petroleum products and power services, knowing the pressure it will have on consumer spending.

Roxas earlier warned that world oil prices could possibly surge higher—well past $100 a barrel, citing projections of Morgan Stanley Inc. that oil could hit $115 per barrel soon.

“Once this happens, even the one-percentage reduction in oil tariffs would not make a dent on people’s wallets. The question now really is, whether the government should continue collecting the VAT on oil products, or if the tax should be suspended to allow our people—consumers—to keep more money in their pockets at this time of abnormally high oil prices,” Roxas said.

The Bagong Alyansang Makabayan [Bayan] also slammed the government for insisting on maintaining the VAT on oil products, saying the Arroyo regime chose to listen to the International Monetary Fund (IMF) instead of the growing public clamor to suspend the regressive petroleum tax.

Reports on Monday quoted an IMF paper describing as “ill-advised” the call to suspend VAT, as such would benefit the rich more than the poor, because the rich spend a higher portion of their income on petroleum compared to the poor.

Bayan described as illogical the IMF conclusion, and argued that every additional centavo spent on oil puts far greater pressure on the poor’s income than the rich ones. This makes it meaningless to compare what portion of the respective income of the poor and the rich directly goes to oil consumption, Bayan said.

The group said the IMF survey pertained only to the direct consumption of petroleum products and did not consider the domino effect of high and increasing oil prices. A P1 per liter-hike in oil prices, for instance, increases the inflation rate by 0.10 to 0.14 percentage points after a 12-month period, according to the Bangko Sentral ng Pilipinas (BSP). This means that there is an overall increase in the prices of basic goods and services, which impact more on the poor than the rich, Bayan said.

“The IMF conveniently ignored these facts because the oil VAT is its brainchild and it had been pressuring the government to implement the said measure since the late 1990s to guarantee that the country has a steady and reliable stream of domestic revenues for debt payments,” Bayan said.

Bayan pointed out that the IMF’s role in the international financial system is to ensure that borrower countries like the Philippines will not default on their obligations to creditors. 

Palace not worried about coup threat

Malacañang said on Tuesday that President Arroyo is pushing through with a weeklong trip to Europe and the Middle East, starting January 22, the supposed culmination date of an alleged plot to destabilize her administration.

THE Department of Health (DOH) has expressed relief that all barriers to the implementation of the revised Milk Code have been eliminated, as the Supreme Court (SC) barred milk companies from filing an extension to appeal its October decision.

HOPING the government will realize that the permanent or temporary removal of the 12-percent value-added tax on petroleum products spell big relief to consumers, Sen. Mar  Roxas II expressed optimism on Tuesday that the energy summit called by Malacañang will tackle his proposal to temporarily suspend the collection of VAT on oil products for at least six month.

TENSION gripped Nueva Vizcaya’s mining sites anew, as tribesmen barricaded the site of an Australian mining company in their ancestral lands.

AS more US troops are due to arrive in Mindanao for new joint military exercises starting February 18, a militant legislator called on the House of Representatives to immediately conduct a review on the continued presence and incidents of abuse of US soldiers in Mindanao under the Visiting Forces Agreement (VFA).

IN an attempt to address what he described as the moral degeneration of society as a result of the tragedies caused by abortion, child abuse, neglect and other forms of antilife and antichild acts, a legislator has filed a bill allowing the parents of unwanted babies to give up their children to the government without fear of arrest and prosecution.

PSYCHIATRISTS are concerned that the feminization of labor migration that has prompted fathers to take the role of mothers is causing a negative effect on children’s behavior.