High power rates in the Philippines, second only to those of prosperous Japan, can be traced to the value-added tax (VAT) and royalties, but it seems the government is not keen on slashing them to give electric consumers some form of relief from their daily grind.

Some weeks ago House Speaker Prospero Nograles asked that the VAT and the royalties on electricity be abolished but it seemed nobody listened. Nograles himself, it seems, is no longer that interested in pursuing his twin proposal.

Then came that controversial letter of the Joint Foreign Chambers of Commerce addressed to President Arroyo asking her not to give due course to some members of Congress to amend the Electric Power Industry Reform Act (Epira) that would stall the full privatization of the National Power Corp. (Napocor).

That, too, had been shot down as the President distanced herself from the controversy brought about by what senators and congressmen decried, to say it mildly, was lack of parliamentary courtesy on the part of the foreign investors who are among the greatest power consumers in the country.

Sen. Alan Peter Cayetano said the President should order the full implementation of Epira, particularly the taxes on renewable and nonrenewable sources of energy, instead of the Congress-inspired Epira amendment.

That would have easily reduced the cost of electricity customers are currently shouldering, but some lawmakers would rather have Epira amended so that the full privatization of Napocor scheduled this year could be reduced to just 50 percent or more.

There are suspicions Napocor officials and those in other government agencies want to perpetuate their hold on Napocor, a heavily indebted state corporation with a record of corruption or inefficiency in the minds of even the World Bank and other international creditors, so that they could continue with their merry ways.

Such accusation may be uncalled for, but it would be good for people in government to provide consumers an acceptable alternative.

At present, the government collects about P0.04 per kilowatt-hour (kWh) for power generated by imported coal and P0.30 to P0.70 for geothermal energy on top of the P1.30 for natural gas.

That could be the reason investors would rather build coal-fired power plants that are definitely more expensive, apart from being unfriendly to the environment.

Just take a look at the VAT and the royalty tax. The royalty tax per kilowatt-hour is P1.80 compared with the tax on imported coal at P0.17/kWh, imported diesel at P0.32/kWh and at P0.30/kWh for geothermal.

Then there is the much-dreaded VAT, a consumption tax, that had been raised to 12 percent in addition to the royalty tax of P1.70/kWh on natural gas, which makes the entire government take P2/kWh.

Some may say the country is not yet ready for that momentum, that great leap to privatization, but it was precisely the reason Congress itself gave Napocor up to 2008 to fully disengage itself from its power ventures through Epira.

Maybe it’s about time Nograles revives his proposal to give consumers a VAT-free environment to end all these sufferings brought about by high electric bills. 

E-mail: raulbvalino@yahoo.com.ph

Editorial: Chuck knee-jerk solutions

EXPECT the usual slew of inquiries, finger-pointing and hand-wringing as the nation contemplates the immensity of the tragedy that befell, for the nth time, a passenger ferry of Sulpicio Lines.

Outside the Box: We do not ‘need’ foreign investment

In this column on Thursday, I wrote about articles in the South Korean newspaper Chosun Ilbo which said some negative things about the smaller Asian economies, including the Philippines. Many of these comments were unjustified and factually unsupported. I said this was “Philippines-bashing.”

William Pesek: Spielberg goes to Bollywood to tap India’s boom

It’s a rare Hollywood tale that has roles for Steven Spielberg, India, warring billionaire brothers, hedge funds and the power shift from West to East.

Omerta: Even (Epira) rules are rigged

The full story about how the Manila Electric Co.’s (Meralco) outrageously high electric power rates came about has, of course, yet to be told. As the folks in Texas would put it, we ain’t heard nothing yet. 

Mirror on the wall: What happened to Nograles’s move to abolish VAT on power consumption?

High power rates in the Philippines, second only to those of prosperous Japan, can be traced to the value-added tax (VAT) and royalties, but it seems the government is not keen on slashing them to give electric consumers some form of relief from their daily grind.

Sen. Edgardo J. Angara: Stopping urban slums through rural development

Last year the United Nations Population Fund estimated that by 2030, 60 percent of the world’s population would live in cities. Of this, 80 percent would be located in developing countries in Asia and Africa.

Philip M. Lustre Jr.: The tragedy of local officials

It’s the height of a Shakepearean drama that local officials who work the hardest are the least likely to become president. They are certainly the most qualified and fit to assume the presidency. But the current situation doesn’t favor them to aspire for the nation’s top political post.

The Saudi spigot

When President Bush traveled to Saudi Arabia in mid-May to plead for an increase in oil production, his friend King Abdullah resisted him.