Wednesday, June 04, 2008 Arroyo okays lifeline subsidy for small power users
PRESIDENT Gloria Macapagal-Arroyo on Tuesday approved the P500 one-time lifeline aid for about four million electric consumers who consume less than 100-kilowatt hour (kWh) of electricity per month nationwide.
Arroyo, at the launching of the “Pantawid Kuryente: Katas ng VAT” program, said the P500 aid would be sourced from the P2 billion expanded value-added tax (e-VAT) proceeds derived from the 12 percent VAT on petroleum products.
The President said the program is a move to give back to the poor the benefits reaped from the implementation of e-VAT, which she said contributed to ensuring funds for infrastructure and social services programs since 2006.
An initial 20 beneficiaries were given certificates of qualification during the program launching at the Aguinaldo State Dining Room in Malacañang.
“Several months ago, we cut tariff, now we would be providing targeted cash payments to the poorest of the poor to help them cope with their electric bills,” said Arroyo.
She said the program would initially be implemented in Metro Manila.
According to Social Welfare Secretary Esperanza Cabral, the program would fall under conditional cash transfer program but it would be given as a one-time aid to lifeline consumers of both the Manila Electric Company (Meralco) in Metro Manila, Central Luzon and Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) regions and the electric cooperatives nationwide.
Cabral said Meralco consumers with less than 100 per kilowatt consumption would simply have to present their electric bill to any Land Bank of the Philippines branch to receive the P500 aid.
In the case of “lifeline” consumers who are served by cooperatives, the government would allocate funds to the cooperatives directly which then would deduct the monthly bill of the lifeline consumers from the P500 aid until the whole assistance is consumed.
Arroyo said this assistance is possible due to the VAT collections, which she stressed are shouldered mostly by the well-to-do or those who can afford. She added that about 80 percent of those who pay the VAT are the well-to-do.
She also said if it were not for the VAT, the peso would remain at P55 to the dollar, which could mean the current price of fuel would be P5 or more than the present rates of about P48 per liter of diesel and about P55 per liter of gasoline.
Budget Secretary Rolando Andaya Jr. said a total of P18 billion is expected to be generated from the VAT on petroleum products this year, with the P4 billion already available and allocated for certain programs.
Under the Cabinet proposed programs, another P1 billion is intended for scholarships and student loans under the Commission on Higher Education (Ched), while the remaining P1 billion was intended for the conversion fund to assist public utility transportation vehicles in converting their diesel engines into compress natural gas or liquefied petroleum gas-enable engines.
Meanwhile, the Energy Regulatory Commission (ERC) said it will not object to the proposed extension of the lifeline subsidy if this would help cushion the impact of the rising cost of electricity.
“That would be a welcome proposal, but I cannot say if that's viable. We have to qualify that with the provisions of the Electric Power Reform Industry Act (Epira) -- as the Epira says the lifeliners are supposed to enjoy the subsidy for 10 years,” said ERC chairman Rodoldo Albano Jr. after the public hearing held at the ERC national office on the petition filed by the Department of Trade and Industry (DTI) against Meralco.
Albano added “if the government is willing to assume that kind of subsidy -- we will not stand to stop the subsidy to be given to the lifeliners, if in the event it will lower the cost of electricity for lifeliners.”
"Whatever the good intentions of other government agencies are, they should submit it for a resolution with the ERC. Whatever recommendations they will submit to us, we will look into it because their efforts are to bring down electricity prices. As said, anyone who would wish or who has a proposal to bring down electricity rates will be welcome," he said.
The DTI in its petition is asking the extension of the lifeline subsidy from 100 kWh to 150 kWh as well as the refund of the systems loss charges which Meralco passed on to its customers.
Meralco said at present, the lifeline subsidy stands at 700,000. (JMR/MSN/Sunnex)
