By JED MACAPAGAL and ANGELA CELIS
The Department of Energy (DOE) does not see the need to declare a state of economic emergency at this time.
This developed as the National Economic and Development Authority (NEDA) is eyeing to fund the planned second tranche of fuel subsidies through excess revenue collections expected this month.
During the President’s televised meeting with Cabinet officials Monday night, Socioeconomic Planning Secretary Karl Kendrick Chua mentioned the proposed doubling of the fuel subsidy program for public utility vehicles from the already announced P2.5 billion to P5 billion with the first tranche to be given in March and the second in April.
“The government is doing everything. Even when you declare an economic emergency, what do you do? It’s the same (interventions that we are doing now),” said DOE Secretary Alfonso Cusi, in a virtual briefing yesterday.
Cusi added fuel price is determined by global supply and demand, the government “can only control it to a certain degree.”
Government is studying possible interventions to pull down pump prices. These include suspension of the excise tax and value- added tax on fuel or suspension of mandatory biofuels mix on local petroleum.
Cusi added the DOE has asked President Duterte to issue an executive order suspending the 7-percent tariff on coal imports under the Asean-India free trade area so local generation companies can source from other countries aside from Indonesia.
Cusi said this is more feasible than proposals to have flexible coal inventory requirements of local generation companies.
“While I understand when the price of coal is up, the needed capital for their (power generation companies’) inventory also increases. They also want to manage their capital requirements but we have to balance,” Cusi said.
The government mandates companies operating coal-fired generation plants to have a 30-day coal inventory.
Rosemarie Edillon, NEDA undersecretary, said in a virtual briefing yesterday the earlier announced P2.5 billion in fuel subsidy for public utility vehicles and the P500 million fuel vouchers for agricultural producers is in the General Appropriations Act, and will be the first tranche to be given this month.
“The additional, we have to wait for the tax collections this March. When there is excess revenues from the program, this can be used to fund unprogrammed appropriations. There is likely excess collections, and that is where we will source the fund,” Edillon said.
At the Talk to the People on Monday, Chua outlined the economic development cluster (EDC)’s proposals to cushion the impact of rising fuel prices.
Apart from the direct fuel subsidy, Chua said the government will continue working with the private firms on promotional discount of oil companies up to P1 to P4 per liter discount.
Third is to increase the buffer stock of petroleum from the current 30 to 45 days which will require a law that “we can work with Congress,” Chua said.
“The fourth is to provide additional fuel vouchers for agricultural producers and we will increase the budget from P500 million to P1.1 billion. The first tranche we will give in March, the second tranche in April. By that time, we will have additional revenues to fund these subsidies,” he added.
Chua cited other measures: promotion of energy conservation; suspension or removal of pass-through fees imposed by the local government units and other entities on truckers; implementation of service contracting in all public transport routes; and promotion of the use of electronic vehicles and the use of active transport (e.g bicycles) as among the measures to mitigate the impact of the oil price hike.
Chua also recommended increasing the buffer stock for liquified petroleum gas from 7 to 15 days; expanding supply and reducing coal price by reducing the most favored nation seven percent tariff rate to zero until December 2022; and maintaining the coal buffer stock at the current 30 days minimum inventory.
To ease the impact on electricity consumers, Chua said the EDC proposed promoting energy conservation measures including the use of technology for energy savings; staggering the increase in the power generation charge; and allowing foreign ownership of microgrids, and solar, wind and other renewable energy sources.
In the agriculture sector, Chua said the EDC recommended implementing the second phase of the ‘Plant Plant Plant’ program subject to the availability of funds; and providing targeted fertilizer vouchers to farmers, and expanding supply through bilateral discussions with fertilizer-producing countries.
Meanwhile, Senate minority leader Franklin Drilon yesterday said the government can anytime suspend the collection of excise taxes on oil products.
Drilon cited the spirit of the Tax Reform for Acceleration and Inclusion (TRAIN) Law allows the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to suspend the collection of excise taxes on fuel to arrest possible inflation.
“The provision of the TRAIN Law should be interpreted liberally, not just in light of suspending the increases in excise taxes but also its imposition. We are in an extraordinary situation,” Drilon said.
The TRAIN Law provides for the suspension of excise taxes from 2018 to 2020 when the price of oil surpassed $80 per barrel. The last increase on fuel excise tax was completed in 2020 but the price of oil has continued to rise since then.
Drilon said he sees no legal impediment when collection of excise taxes of fuel products are suspended even if the law has not been amended.
Drilon recalled that in December 2021, the BIR suspended the imposition of the 12- percent value added tax on exporters’ purchases after it was met with objections from exporters, domestic suppliers, and stakeholders, with the BIR qualifying, however, the postponement is solely due to the COVID-19 pandemic.
Senate majority leader Juan Miguel Zubiri said overnment should consider other alternative fuel sources and e-vehicle programs as mandated by two laws.
“We should again think of alternative fuels sources like biodiesel and bioethanol which can be locally produced,” said Zubiri, author of the Biofuels Act
Lawmakers have been calling on President Duterte to call for a special session of Congress to discuss ways how to cushion the effects of the increase in oil prices, including the declaration of state of economic emergency. – With Raymond Africa
