Transport groups unhappy on subsidy

Published by rudy Date posted on April 2, 2011

VARIOUS transport organizations on Friday expressed disappointment over the move of President Benigno Aquino 3rd to grant public utility jeepneys and tricycles fuel subsidy for at least one month, saying that the move was useless, unfair and just part of the government’s divide-and-rule tactics on their sector. A few lawmakers said that President Aquino must also suspend the value-added tax (VAT) on oil products to reduce prices at the pumps, which the Palace said was not feasible.

George San Mateo, secretary-general of the Pagkakaisang Samahan ng Tsuper at Operators Nationwide (Piston), said that the subsidy would just be a waste of money considering that prices of oil products go up almost every week.

“What we need is a concrete solution to the oil crisis, not doleouts to select transport organizations, and [not] to sow division among different transport organizations,” he added.

Piston pushed for repeal the Oil Deregulation Law and removal of the 12-percent VAT on oil products so that the government can have full control over fuel prices.

Mateo said that these steps could also bring down fuel prices and benefit private motorists, delivery services and ordinary households that use liquefied petroleum gas (LPG).

Orlando Marquez, president of the League of the Transport Operators of the Philippines and concurrent spokesman of 1-UTAK party-list, urged the government to implement the modernization, rehabilitation and repowering program for public utility vehicles.

The program, he said, would help public transport operators switch to more efficient fuels such as compressed natural gas and cheaper alternatives such as LPG.

Marquez also pressed for the suspension of traffic ordinances being imposed by local governments that conflict with the Traffic Code of the Philippines.

He explained that the ordinance violation receipts issued by local units for traffic law violations were a burden faced by public transport drivers and a tool used by traffic law enforcers to extort money.

Transport groups are also demanding a no-nonsense implementation of a nationwide drive against colorum vehicles and traffic law enforcers who extort money from

Colorum refers to public transport vehicles that do not have franchises to operate.

The Metro Manila Bus Operators Associations of the Philippines also on Friday said that the fuel subsidy favors oil companies and could become an avenue for corruption.

Lawyer Grace Adducol, spokesman for the bus group, said that it was not true that bus operators were consulted on the fuel subsidy and agreed to be excluded from the program.

VAT removal
At the House of Representatives, Rep. Teodoro Casiño of Bayan Muna party-list led calls also on Friday to remove the VAT on fuel products.

He said that the government could suspend the VAT on fuel products since the Department of Finance had pegged the collection from that tax at P4 billion from January to March 2011.

“The government should now ease the people’s burden by indefinitely suspending VAT on oil while Congress hears proposals to either reduce or remove the VAT on oil and petroleum products. In the medium term, we should return to a regime of regulation in the industry, regain control over Petron and create a system for centralized procurement of oil,” Casiño added.

He said that removing the VAT on oil products would benefit households and other sectors unlike the fuel subsidy that benefits only a part of public transport.

“High oil prices affect everyone, from housewives, power consumers, manufacturers, farmers and fisherfolk. VAT suspension will benefit not just one sector but all,” Casiño added.

Rep. Ben Evardone of Eastern Samar, the chairman of the House Committee on Public Information, agreed.

“We welcome the fuel subsidy program of the government but it should include the other vulnerable sectors like fisherman and farmers in the countryside. They are also hit hard by the unabated spiraling increase of fuel prices,” he said.

Evardone added that fishermen also use gasoline for the engines powering their boats, while farmers use the same fuel for their farm machinery and tractors.

“Most of the time their [fishermen and farmers] interests are being neglected. While the subsidy to Metro Manila drivers is laudable, it should be pointed out that Metro Manila is not the Philippines,” he stressed.

Also, Evardone called on the Department of Energy to intensify its monitoring of the prices of fuel in the provinces since these are much higher than in the urban centers.

Rep. Milagros Magsaysay of Zambales warned that the fuel subsidy would not stop the oil companies from jacking up their prices.

“Oil companies will still sell their oil at the price they want,” she added.

Palace position
While Malacañang also on Friday agreed that giving fuel subsidy to select public utility vehicles, such as jeepneys and tricycles, was “not sustainable,” it opposed the lifting of VAT on oil products.

Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang said that the fuel subsidy program was not a long-term solution to address rising fuel prices.

“I agree with you that it’s not sustainable. We never meant this to be sustainable,” Carandang replied when asked to comment on some economists’ statements that granting such assistance is “not sustainable.”

“But given the high fuel prices and given the possible
impact that this will have on ordinary people, we felt that
we had to take some action,” he said.

Carandang added that the government was studying long-term actions to address rising fuel prices.

He, however, did not say what these actions are, saying that he was not at liberty to reveal them.

Carandang said that the Energy department was ironing the details of the fuel subsidy program and that it was hoping to get the assistance in place “within two to three weeks.”

During a chance interview in Iloilo City, President Aquino also on Friday said that removing the VAT on oil products would also mean losing proceeds from VAT amounting to P1 billion a month.

“That is easily about a billion per month, that is the minimum estimate, the billion can go in so many things, parang kumbaga dagdag iyon na revenue sa estado ipo-forego natin [that is an addition to government coffers that we would forego if we remove the VAT on oil products],” Mr. Aquino added.

He said that the government had no control over the prices of oil products in the world market and that what they could do initially is to give fuel subsidy to public utility jeepneys and tricycles. –Jefferson Antiporda, Llanesca T. Panti and Cris G. Odronia, Manila Times

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