Bulatlat

Asserting that the repeal of the controversial oil deregulation law is a long and complicated process, Liberal Party’s top presidential contender and incumbent Sen. Mar Roxas over the weekend instead proposed Senate Bill No. 1962 suspending the 12-percent Value-Added Tax (VAT) imposed on oil to cushion impact of sharp increases in the prices of petroleum products worldwide.

BY GERRY ALBERT CORPUZ
Contributed to Bulatlat
Vol. VII, No. 50, January 27-February 2, 2008

UP DILIMAN, QUEZON CITY – Asserting that the repeal of the controversial oil deregulation law is a long and complicated process, Liberal Party’s top presidential contender and incumbent Sen. Mar Roxas over the weekend instead proposed Senate Bill No. 1962 suspending the 12-percent Value-Added Tax (VAT) imposed on oil to cushion impact of sharp increases in the prices of petroleum products worldwide.

The senator and LP President made the pitch for his pet bill on VAT on oil at the forum billed People’s Response To Rising Oil Prices sponsored by Bagong Alyansang Makabayan (Bayan or New Patriotic Alliance) and the People’s Unity Against Oil Price Hikes.

Speaking before a jampacked crowd of sectoral and multisectoral leaders, Roxas admitted that as of now, the legislative measure suspending the VAT on oil is the only concrete measure he could offer to the Filipino people and gravely affected sectors at this point in time to offset the economic impact of rising prices of oil products in the world market.

“Senator Roxas is non-committal,” according to one of the leaders who was asked by Bulatlat to give his comment on Roxas statement. “More appropriately speaking, he is not supporting the politically correct position of mass organizations to scrap permanently the 12-percent VAT on oil, the repeal of the Oil Deregulation Law and the nationalization of oil industry.”

However, the activist leader – who talked on the condition of anonymity –said the six-month suspension of VAT on oil could still provide some economic relief specially to direct consumers of oil like jeepney drivers, liquefied petroleum gas users and small fisherfolk all over the country.

“But it is still not a permanent solution,” the militant leader added. “It is only good for the mid-year episode of 2008. After six months, what’s next?”

Roxas, chair of the Senate Committee on Ways and Means said the purpose of SB 1762 is to provide immediate relief to millions of Filipinos severely affected by the seemingly unstoppable increases in the prices of oil products in the world market.

The 2010 presidentiable said after six months, the Senate and the affected sectors could start talking about lasting solutions to address the surging of prices of petroleum products and what to do to existing cartel in the oil industry.

The senator rebuked Malacañang economic managers’ projection of a “doomsday scenario” that would supposedly take place once SB 1762 is passed by Congress, stressing that the P30 billion ($7.35 million at the Jan. 25 exchange rate of $1:P40.80) that would be slashed from the government’s tax collections merely represent 0.4 percent of the Gross Domestic Product (GDP), and as such would not have a strong impact on the government.

Roxas also said the government has no credibility in spending people’s taxes and it would be better if the P30-billion VAT on oil would be spent by the people and consumers, rather than spent by the Arroyo presidency.

Four bills

While Roxas has kept himself satisfied with SB 1726, militant lawmakers belonging to Bayan Muna (People First), Anakpawis (Toiling Masses) and Gabriela Women’s Party (GWP) last year filed four separate bills that address comprehensively the issues and concerns on rising prices of oil products and the oil industry in general.

In his 15-minute PowerPoint presentation, Bayan Muna Rep. Teodoro Casiño said he and Reps. Satur Ocampo (Bayan Muna), Crispin Beltran (Anakpawis), Liza Maza and Luzviminda Ilagan (both of GWP) last year filed four house bills aimed to stop the transnational plunder and exploitation of the cartel in the oil industry.

The first bill filed was House Bill No. 1724, repealing Republic Act No. 8479 which is otherwise known as the Downstream Oil Deregulation Act of 1998. Under the bill, the repeal of the oil deregulation law would be followed by immediate steps such as the reversal of the privatization of Petron, centralized procurement and the establishment of a buffer fund in connection with the institution of price controls on petroleum products and the funds would be used to mitigate the impact of sudden price hikes and replenish using earnings from its centralized procurement, refining and retailing operations.

On Nov. 6, 2007, the militant party list lawmakers filed the other three bills, namely HB 3029 known as an Act Regulating the Downstream Petroleum Industry and For Other Related Purposes that would lead to the creation of Petroleum Regulatory Council and the establishment of the Oil Price Buffer Fund, HB 3030, an Act Instituting Centralized Procurement of Petroleum in the Country that would lead to the establishment of Philippine National Oil Company-National Petroleum Exchange.

The PNOC-National Petroleum Exchange would assure that the indigenous petroleum and petroleum-based resources shall be primarily for the benefit of the general welfare, as well as proper, adequate and continuous supply of crude oil and refined petroleum products under the most economic and competitive terms possible considering all available sources of supply, while assuring the public of reasonable prices, preventing monopolies from exploiting the people and minimize cost and outflow of foreign exchange involved in the operations of oil industry.

Meanwhile, HB 3031 or an Act Rationalizing Petron Corporation is meant for the full-blown nationalization of Petron to effectively and decisively control and stop the oil cartel and monopoly pricing.

“We expect a major political battle royale with these pro-people four bills in Congress, so we should rally the people behind these bills authored and dictated by the people’s interest and welfare,” Casiño said.

Fisherfolk

Meanwhile, around 710,000 out of 1.3 million small fisherfolk or nearly 55 percent of the Filipino fisherfolk are severely affected by soaring prices of petroleum products, according to the militant fisherfolk alliance Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya or National Federation of Small Fisherfolk Organizations).

Pamalakaya national chairman Fernando Hicap said the seemingly uncontrollable hikes in the prices of petroleum products has become an “across-the nation-nightmare” among small fishermen who use an average of 5-10 liters of regular gasoline everyday to enable them to sail and fish to rough seas within the municipal fishing waters.

“Mere reports that the prices of oil petroleum products could breach the $100 per barrel mark have become a terrible psychological thriller among our poor fishers,” Hicap said. “What more if prices of petroleum products, specifically regular gasoline reaches an average P50 ($1.22) per liter? We have a social volcano here that is ready to explode anytime,” Hicap said.

Based on a Pamalakaya study, the owners of some 177,627 motorized small fishing boats across the country who employ 2-3 small fishermen could no longer bear the brunt of rising prices of petroleum products, and such scenario may soon compel small boat owners either to reduce hours of fishing from an average of 8-12 hours to 4-8 hours or abandon their 4 to 16 horsepower motors, and go back to paddles because of high and unaffordable prices of petroleum products.

"That's because they could no longer afford the cost of fuel, particularly regular gasoline now pegged at more than P40 ($0.98) per liter," the group said. At present, there are 292,180 non-motorized boats out of 469,807 registered boats in all the country's municipalities or 62 percent of all registered municipal boats all over the country.

Small Filipino fisherfolk use at least 5-10 liters of regular gasoline, costing them P200-450 ($4.90-11.03) per fishing operation based on current prices of petroleum products in the country. As per fishing operation, the normal average fish catch is 5-10 kilos at P40 ($0.98) per kilo of fish or roughly P200- 400 ($4.90-9.80) a day.

"The oil cartel is making money from our fisherfolk oil consumers, by making them slaves and perpetual buyers of their overpriced and highly taxed regular gasoline, courtesy of their cartelistic operations, the Oil Deregulation Law, and their patented practice of corporate exploitation," the group said.

Bayan secretary-general Renato Reyes, Jr. said prices of oil products went up as much as 18 percent for unleaded gasoline, 15 percent for diesel and 16 percent for LPG or an average 16-percent increase in retail price. He said that since the government imposed VAT in November 2005, prices of unleaded gasoline increased by 19 percent, diesel by 18 percent, and LPG by 32 percent.

Based on the study made by Bayan in cooperation with IBON Foundation, jeepney drivers all over the country were forced to hurdle additional P147.30 ($3.19 at last year’s average exchange rate of $1:P46.15) per day last year due to VAT on oil, while tricycle drivers spent P27.04 ($0.66) per day. Also last year, consumers of LPG spent an additional P76.94 ($1.89) for every 11 kilos of LPG due to VAT and rising prices of petroleum products.

Crisis or opportunity?

Meanwhile, Reyes described the scheduled government’s Philippine Energy Summit starting on Jan. 29 is nothing but a crisis to the Filipino people and an opportunity to transnational clients of President Gloria Macapagal-Arroyo to further exploit the people and the country’s natural resources.

“The government seeks to make this a real super road show presentation to please giant corporations in the oil and energy sector,” the Bayan secretary-general said.

However, three militant leaders led by Anakpawis Rep. Beltran, Reyes and Confederation for the Unity, Recognition and Advancement of Government Employees (Courage) president Ferdinand Gaite, who were invited as speaker and reactor, respectively, will still attend the energy summit.

“They will attend not to provide moral and political premium to this bogus summit, but to advocate the people’s issues, analysis and alternatives,” Reyes said. “We will challenge them in their own turf and turn the tables around in the name of people’s collective interest.” Contributed to Bulatlat