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THE
national government is confident the strong peso will
continue to be the strongest mitigating factor against
high oil prices until next year.
National
Economic and Development Authority Acting Director
General Augusto Santos said government confidence stems
from its analysis. “The peso will continue to remain
strong until next year. It will play at current levels
until 2008.”
Santos
also said that if it weren’t for the strong peso, oil
prices would have seen double-digit increases in the
past few months. Speaking at the gross domestic product
briefing in Makati City Thursday, he added that while
oil prices continue to increase and the demand in the
domestic market remains high, the gap between these two
factors is only 2 percent against the 12-percent
increase of the peso.
Apart
from the strong peso, he said government is not yet
considering other means to counter the effects of high
oil prices, and while there is
already a proposal to cut oil tariffs, this is still
being evaluated and could not yet be adopted.
Previously, economists recommended the reduction and/or
abolition of tariffs and the provision of subsidies as
intermediate solutions to high oil prices.
Private
economist Bienvenido Oplas Jr. said the spike in oil
prices is expected to continue as long as demand is
high. He also said oil prices are not far from reaching
$100 per barrel, riding solely on high demand.
While he
believes that energy conservation is still the key to
achieving a long-term solution to high oil prices, Oplas
said the government should first consider drastically
cutting or abolishing petroleum taxes, especially since
a drastic reduction in oil use would take time.
Oplas
said that in the
Philippines,
at least three direct taxes are collected on petroleum
products. These are import, excise and value-added tax.
He said
that if the government slashes even just excise taxes,
many consumers would be able to experience some relief.
Excise
taxes are placed on “public-bad” products such as
cigarettes, but in the case of oil, which has already
become a necessity and a “public good,” this tax is no
longer necessary, he said.
University of Asia and the Pacific economist Victor
Abola said the government should also look into the
possibility of giving subsidies to transport groups and
that the government must also increase its efforts to
“ring alarm bells” for people to reform and look for
ways to replace their oil consumption with alternative
energy sources.
Abola
also believes that petroleum tariffs should be brought
down to zero to prevent the passing on of these tariffs
to consumers. |
