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Thursday, August 18, 2005
Gov't eyes emergency powers to address oil crisis
THE government is readying a bill based on a Marcos era law that would give certain agencies emergency powers to impose energy conservation measures in case high world crude prices threaten to deplete the country's foreign exchange reserves, Energy Secretary Raphael Perpetuo Lotilla said.
Lotilla, during the press conference of Executive Secretary Eduardo Ermita and the economic managers, said the Philippines' oil bill in 2004 was US$4.57 billion and that for every US$10 increase in the price of oil per barrel, the country needs to shell out US$1.26 billion.
He said the economic managers are "seriously considering" recommending to President Arroyo and Congress the adoption of a law based on Batas Pambansa Bilang (BP) 73 passed in 1980 that would give government agencies emergency powers for a limited time to prescribe mandatory energy-saving measures for the public and private sectors.
He said the law, among others, will allow government agencies to: establish and administer a fuel allocation and rationing program; require the distribution and sale of energy blends to increase the use of domestic energy resources; require industrial, commercial, and transport entities to collect waste oil for recycling as fuel or lubricating oil; regulate the use of air-conditioning and thermostat in commercial and industrial establishments and setting them to certain temperature; stagger working hours in industrial and commercial establishments or fix the number of working days per week; and to regulate the use of motor vehicles to conserve fuel and relieve traffic congestion.
He said gas rationing would be the "last resort."
He said BP 73 was crafted in June 11, 1980 when the price of crude oil was highest due to the Iran-Iraq war. He said the law was extended until 1990.
Executive Secretary Eduardo Ermita said he agrees with National Security Adviser Norberto Gonzales that the oil crisis has become a national security threat when prices reached US$50 per barrel. He said at the current price level, foreign exchange reserves are in danger of being used up just to acquire fuel.
Ermita said the opposition and those who seek to weaken the Arroyo presidency could take advantage of the situation by agitating certain sectors and blaming the national leadership.
However, he said the Palace is not trying to divert the public's attention from the impeachment process and other allegations against President Arroyo. He said other countries have been reeling from the impact of the oil price hikes.
Planning Secretary Augusto Santos said at US$60 per barrel, oil prices are expected to raise the inflation rate for 2005 from the target 7.9 percent to eight percent. He said domestic growth will slow down from the projected 5.3 percent to 5.2 percent.
At US$70 per barrel, Santos said inflation will rise to 8.1 percent while domestic growth will slow down 5.1 percent.
Finance Secretary Margarito Teves and Trade Secretary Peter Favila said the Philippines is not likely to have an economic meltdown like that of Argentina. Teves said Argentina's problem is a mixture of fiscal, economic, and foreign exchange crises while the Philippines only has to deal with the fiscal issue.
Teves said government will continue to push for the implementation of the expanded value-added tax (e-VAT) law despite the rising oil prices.
"The reformed VAT is a bitter pill but one we need to take if our country's economy is to recover. Allowing our fiscal position to further deteriorate and adversely affect the investment climate and exchange rate will cause our people more hardship in the long-term," he said.
He said there is no need to amend the e-VAT law because it would just "complicate things." He said tinkering with the e-VAT law as proposed by Senator Manuel "Mar" Roxas II to restore the tax exemption on the power sector would open up other provisions to amendments and would take a long time.
He said there might be other ways to achieve the same desired effect without having to amend the law.
He said once the Supreme Court's temporary restraining order on the e-VAT is lifted, Executive Order (EO) 440, which reduces import tariff on petroleum products from five to three percent, also takes effect. Under EO 440, liquefied petroleum gas (LPG) will remain at zero percent.
Lotilla said government is working on other measures to ensure a steady supply of oil. He said oil companies have agreed to sign on Friday an agreement that would limit the service hours of gasoline stations.
He said government is also conducting eight explorations, including those in Palawan and the Sulu Sea, and maximizing its hydro, geothermal, and coal plants.
Favila said he continues to hold dialogues with manufacturing and industry associations to keep prices steady. He said he has requested the tin can manufacturers to delay increasing their prices until their existing inventory is consumed.
He said he is also talking to firms involved in generic packaging, such as those that use tetra packs and other forms of packaging. He said people should not hesitate to buy products in tetra packs because they are cheaper than those in the more expensive tin can. (JMR/Sunnex)
(August 18, 2005 issue)
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