Malacañang’s Pantawid Oil Subsidy Program, A Deception Says Lawmaker

By INA ALLECO R. SILVERIO
Bulatlat.com

Are subsidies for public transport drivers enough, or is putting a stop to oil price hikes better?

Bayan Muna Rep. Teddy Casiño has expressed strong criticism against the President Benigno Aquino’s announcement of his government’s Public Transport Assistance Program (PTAP or Pantawid ). The program started earlier this week, but as Casino pointed out, the Department of Energy (DOE) has yet to issue smart cards to jeepney and tricycle drivers. “There’ll be more oil price hikes in the coming days and weeks,” he said.

The subsidy, amounting to P1.16 per liter (US$.27), has already been overshadowed by the most recent pump price increases: P1.50 (US$.39) per liter for diesel, and P1.25 (US$.30) for gasoline. The subsidy program, the government said, will be implemented in two weeks.

The program partially subsidizes the average consumption of identified public transport group provided that they have legitimate franchises under the Land Transportation Franchising and Regulatory Board (LTFRB). The Energy Department will also be using “smart cards” to ensure the integrity of the program.

In the case of tricycles, the PTAP will subsidize a portion of their average consumption while the remaining portion will be funded by local government units through counterpart allocations. The government has not included the farmers and fisherfolks in the relief assistance, but Malacañang said that it is studying proposals for this.

After one-month of implementation, the DOE will submit a report to the Inter-agency Energy Contingency Committee (IECC) on the status of the PTAP implementation which will then prepare a recommendation to the President who will decide whether to continue or scrap the program.

According to EO 32, the initial P450,000 million (US$ 104,651 ) will come from the special account in the general fund (SAGE) of the DOE to be released by the Department of the Budget and Management (DBM).

The lawmaker said the much publicized “subsidy” for public transport drivers is not even enough for a full tank of diesel or gasoline for jeepney and tricycle drivers.

Citing data from the Land Transportation Franchising and Regulatory Board (LTFRB), Land Transportation Office (LTO) and the DOE, Casino said it is easy to see how the subsidy is nothing but “a drop in the fuel tanks of our country’s public transport drivers.”

“As of December 2010 LTFRB data show that there are 214,596 public utility jeepneys (that use diesel) and roughly 1,000,000 tricycles (that use gasoline). This means for jeepney drivers, government will give a total of P1,050 IUS$24) to each of them and tricycle drivers will receive P150 (US$3).”

Casiño said that jeepney drivers buy diesel which is pegged at P47.10/liter. (US$1.09)

“That means each driver can get only a total of 22.3 liters as of today’s prices. This is not enough for a full tank since jeepney fuel tank capacities range from 60 liters to 100 liters. It’s hard to miss how Malacañang is deceiving our drivers and the public,” he said.

“Using the common prices per liter as monitored by the DOE, gasoline is at P54.85/liter (US$1.27) . We can determine that each tricycle driver will only get 2.73 liters only from this program. This is equivalent to only about 2 to 3 days of a tricycle’s operation. Note that most tricycle fuel tanks go from 4.5 to 5.4 liters. Malacañang’s subsidy for tricycles driver is only worth half a tank of gasoline.”

According to Casiño, EO 32 will not cushion the impact of continuing increases in fuel prices as Malacañang wants drivers and the public to believe. He said that the initial P450 million allotted for fuel subsidy program that Malacañang said will last for two months will not make a dent in the incomes of jeepney and tricycle drivers and operators since the 11 oil price hikes so far this year have negated whatever subsidizing effect government purports the program will have.

In the meantime, the Bayan Muna solon also questioned why of the total allocation, jeepney drivers will get P225,325,800 (US$ 52, 407) and tricycle drivers P150,000,000 (US$ 348,837).

“Where will the remaining balance of P74,674,200 (US$ 173,661) go? Will it be for printing the smart cards and other administrative expenses? Isn’t this another state-sponsored scheme to be shouldered by the tax-paying public?”

In defending the fuel assistance program Palace spokespersons have said that they want to benefit the greater riding public and stop calls for fare hikes. Secretary Ramon Carandang of the Presidential Communications Development and Strategic Planning Office said in a press briefing that with the implementation of the EO, transport groups that are still asking the government for more fare hikes should reconsider their plans.

Helping the DoE implement the Patawid Pasada program are the Department of National Defense, Department of the Interior and Local Government, and the Dof Transportation and Communication. Other government agencies were directed to extend assistance to the PTAP as may be deemed necessary. The list of beneficiaries of Pantawid Pamilya may also be expanded based on EO 32.

“Upon the recommendation of the IECC, the DoE may review the list of those entitled to the PTAP to include other sectors whose operations may be classified as sensitive to high oil prices and it may also suspend the PTAP when it determines that the impact of fuel costs on these sectors no longer exists,” the order read.

Casiño said, however, that the fuel subsidy program was never among the proposals of transport groups and legislators since band-aid solutions always fail the sectors whose incomes have been on the downturn for each and every oil price hike.

“This pantawid pasada will not prevent fare hikes in the medium and long term. Legislators, transport, and consumer groups are pushing for the suspension of the VAT on oil while Congress processes measures that shall bring reforms to the downstream oil industry and institute price controls on oil products,” he said.

The lawmaker called on President Aquino to go beyond gas subsidies to the transport sector, saying that subsidies do not hit the problem on the head.

“He could easily issue an executive order to the Department of Finance and the Bureau of Internal Revenue to suspend the VAT on oil. This can be done since the adoption of the VAT was initially done by the government via Executive Order No. 273 (titled: Adopting A Value-Added Tax, Amending For This Purpose Certain Provisions Of The National Internal Revenue Code, And For Other Purposes) on July 25, 1987,” Casiño said.

Urgent Need for a Wage hike

For their part, youth and students group Anakbayan said that the latest oil price hikes reveals the uselessness of President Aquino’s “oil alms”, and that they underscore the urgent need for a wage hike.

Anakbayan national chairperson Vencer Crisostomo said Malacañang’s subsidy program for oil was already “nullified even before it was implemented.”

“Obviously, the program was not meant to reduce the effects of the hikes on the public, only the effect on Aquino’s survey ratings” said the youth leader, in reference to the recent surveys which have shown a huge drop in the president’s popularity.

Crisostomo called the hike “a vindication” of their call for the imposition of controls on the prices of petroleum products. The group has also been calling for wage hikes for workers in both the private and public sectors.

“Provided that the wage increase is bigger than what the Dept. of Labor Exploitation is proposing, then we can say that a hike is a better aid for the public against the impact of oil and other price increases” Crisostomo said.

“Any wage hike proposal must take into consideration the huge gap between the minimum wage and the daily cost of living” he said.

In the National Capital Region where the daily minimum is pegged at P404 but the cost of living for an average family (six members) is at P917.