PRESIDENT Marcos Jr. has designated Raphael Perpetuo Lotilla as energy secretary, a post he held under the Gloria Arroyo administration.
The announcement made yesterday by Press Secretary Trixie Cruz-Angeles comes as oil and electricity prices continue to rise.
Cruz-Angeles later clarified that Lotilla’s designation is “right now a nomination, pending clarification of his employment status.”
Cruz-Angeles said Lotilla is the President’s “personal choice” to head the DOE but he is still independent director of Aboitiz Power and of ENEXOR.
She said that under Section 8 of Republic Act 7638 or the Act Creating the Department of Energy, “no officer, external auditor, accountant, or legal counsel of any private company or enterprise primarily engaged in the energy industry shall be eligible for appointment as secretary within two years from his retirement, resignation, or separation therefrom.”
“Thus, while the matter is reviewed to determine whether an independent director is considered an officer of the company, Lotilla is considered a nominee,” Angeles said.
The secretary of the Department of Energy is one of the remaining “sensitive” Cabinet posts that Marcos had not filled before he assumed the presidency on June 30.
Another awaited announcement is for the secretary of the Department of Health, amid the rising number of COVID-19 cases and the emergence of more variants and sub-variants of the coronavirus.
The other unfilled posts are for the Department of Environment and Natural Resources, Department of Science and Technology, and the Human Settlements and Urban Development.
Lotilla served as energy secretary from 2005-2007.
He has also served as president of the Power Sector Assets and Liabilities Management Corporation (PSALM) and as deputy director general of the National Economic Development Authority (NEDA).
Lotilla is a law professor at the University of the Philippines where he graduated. Aside from Bachelor of Laws, he also holds a Masters of Laws degree from the University of Michigan Law School in the US.
He joins a former Arroyo appointee in the Marcos Cabinet, Public Works Secretary Manuel Bonoan who served as undersecretary of the Department of Public Works and Highways.
Lotilla succeeds Alfonso Cusi, who is also a former member of the Arroyo administration under which he served as general manager of the Manila International Airport Authority and later of the Civil Aviation Authority of the Philippines (CAAP).
Lotilla’s appointment was made amid the current rising prices of oil and the high cost of power in the country.
Marcos wants to sustain the current subsidy program for the public transportation sector and expand it to include tricycle drivers, fishermen, and farmers to cushion the impact of rising prices of oil.
The President also wants to pursue and expand alternative energy sources projects like nuclear energy, to address the supply needs and bring down the cost of electricity.
Last week, Marcos met with DOE officials to discuss energy programs and ways how to address the problems of oil prices.
OPSF REVIVAL
Rep. Michael Romero (PL, 1-Pacman) urged Marcos to revive the old Oil Price Stabilization Fund (OPSF) created by his late father’s administration in 1984 to avoid frequent adjustments in oil pump prices brought about by fluctuations in the cost of crude oil in the world market and the peso-dollar exchange rate.
“I hope that President Ferdinand “Bongbong” Marcos Jr. would be open to this proposal since it was his father who created the OPSF under Presidential Decree No. 1956, issued on Oct. 10, 1984,” said Romero, an economist.
In October last year, Marcos asked the Department of Energy (DOE) under the Duterte government to study the revival of the OPSF to cushion the economy from the inflationary effects of the sky-rocketing oil prices, and to suspend the excise tax on oil products.
Romero, who first called for the suspension of excise tax on oil last year when was deputy speaker, proposed that the new fund be sourced from higher excise taxes imposed on diesel, gasoline, cooking gas, and other oil products under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
He said there are weekly wild swings in domestic pump prices, with the price of diesel projected to go down this week by at least P5 per liter after going up by more than P6 last week.
Romero, who was deputy speaker in the 18th Congress, said prices would remain “volatile and elevated” because of the Russia-Ukraine war and the recovery of many nations from the Covid-19 pandemic, underscoring the need for a buffer fund to absorb price spikes.
He pointed out that the buffer mechanism would work in such a way that it would answer for certain price increases so these would not be passed on to the public.
“Since the government is not agreeable to the suggested suspension of excise taxes while the cost of crude is above $80 per barrel, we could use part of these impositions as a price stabilization fund to provide relief to the public from increased fuel and consumer prices,” he said.
Under the old decree, the OPSF was sourced from fuel taxes and was used “to reimburse the oil companies for cost increases on crude oil and imported petroleum products resulting from exchange rate adjustment and/or increase in world market prices of crude oil.”
The OPSF was administered by the then ministry (now department) of energy, which then President Marcos Sr. subsequently authorized to invest in fixed-income instruments with the earnings accruing to the stabilization fund.
Republic Act 8479 otherwise known as the Downstream Oil Industry Deregulation Act was enacted in 1998 to liberalize and deregulate the oil industry through a competitive market.
However, prices of petroleum products continued to sore since the country remained a net importer of oil and changes in global prices still dictate local pump prices. — With Wendell Vigilia
