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Thursday, April 27, 2006
Cabinet rejects lifting of expanded VAT on oil
MANILA -- President Gloria Macapagal-Arroyo's Cabinet on Wednesday junked four measures, including the suspension of the expanded value-added tax on oil, intended to help mitigate effects of soaring fuel prices.
Also rejected were the implementation of a four-day workweek for government employees, imposition of daylight saving time (DST), and suspension of fuel requirements under the Clean Air Act.
Energy Secretary Raphael Perpetuo Lotilla said the Cabinet approved instead the reduction of the tariff on petroleum products and a review of the temporary lowering of tariffs on crude and finished fuel products.
The National Economic and Development Authority (Neda) committee on tariff and related matters will make the recommendations before Congress resumes session in May 15.
Cabinet officials also recommended the expansion of the number of gasoline stations offering P1 discount on diesel for passenger jeepneys.
Other Cabinet recommendations include:
* The expansion of the coverage of discounted and smaller-sized liquefied petroleum gas (LPG) tanks.
Lotilla said Pilipinas Shell is offering discount vouchers of P15/tank and 50,000 vouchers would be distributed in depressed areas in Metro Manila by the social welfare department.
* The finalization of revenue guidelines for the importation of ethanol. The first set will be coming in on the first half of May.
* The strict implementation of energy conservation measures.
* The acceleration of the use of alternative fuels such as LPG and coco bio-diesel.
In line with this, President Arroyo has ordered the Philippine National Oil Company (PNOC) and the National Development Company (NDC) to provide P500 million each for the planting and development of jatropha carcus (tuba-tuba).
* The fast tracking of the enactment of the Biofuels Act of 2006 and the Renewable Energy bill.
* The promotion of hybrid vehicles and flexible fuel vehicles, which can take on more than 10 percent ethanol.
* The conversion of gasoline-fed vehicles to LPG or autogas.
President Arroyo has ordered the Development Bank of the Philippines to provide, through the Postal Bank, assistance for individual taxis and jeepneys to convert from gasoline to LPG which results in savings of P300 to P400 a month.
* The acceleration of the construction of compressed natural gas mother station by Shell and mother-daughter stations to be put up by PNOC and foreign investors like Samsung.
Finance Secretary Margarito Teves said the Cabinet is not proposing the suspension of the VAT on oil because the revenues to be generated from this are needed for social services and to realize the government's target of a balanced budget by 2008.
Lotilla said DST is not advisable for the Philippines because the difference in the number hours between seasons in the country is not significant unlike in some countries where daytime is longer during certain seasons.
Instead, he said the Cabinet approved Trade Secretary Peter Favila's proposal that government and private sector workers be allowed to report for work and leave their offices in different times to ease traffic congestion and save on fuel.
Lotilla also said a study of the Development Academy of the Philippines (DAP) showed that the four-day workweek, while resulting in savings, would adversely affect the productivity of government workers. He said asking public employees to report for work earlier would exact a heavier toll on their efficiency considering that it is so hot and humid.
He said the Cabinet also junked the proposal to suspend the requirements of the Clean Air Act on fuel standards because of its effects on pollution and public health.
Lotilla said the importation of ethanol is taking long because of the diversion of ethanol to other uses. "It's also used for the production of spirits so it's edible and the concern was how to denature it in such a way that it will not be fit for human consumption and that it will truly go to the alternative fuels program because otherwise there will be a huge differential between ethanol used for human consumption and for motor vehicles," he said. (JMR/Sunnex)
(April 27, 2006 issue)
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