Palace urges belt tightening

MANILA, Philippines – Consumers have no choice but to tighten their belts in the wake of runaway increases in the prices of oil.

This is what the Aquino administration has been doing, deputy presidential spokesperson Abigail Valte said yesterday.

She said the government cannot do it alone, and the general public should also do its share by cooperating in measures to help cope with the adjustments in oil prices.

Valte denied the government is helpless against any surge in the prices of oil, but could not give any specific plan to cushion the impact, at times calling on the riding public also to be “vigilant” in such times of crisis.

The only thing Valte mentioned was that President Aquino is willing to meet with all leaders of transport groups but is silent when asked on what the government could possibly offer the public transport groups to ease their burden.

“We still do not know what would be discussed. Of course, again, we have an idea of what the transport groups will raise to the attention of the President, so we will look into that,” Valte said.

Valte refused to give any hint whether the government’s Pantawid Pasada program for jeepney and tricycle drivers can be extended for a few more months, tossing up the issue to Energy Secretary Jose Rene Almendras.

As to the possibility of having to penalize or impose sanctions against the so-called Big 3 oil firms on allegations of manipulating the prices of oil in the domestic market, Valte said the financial books of such firms are open for scrutiny to the public.

“The (financial) books of the oil companies are all with the Securities and Exchange Commission, so anyone interested can get a copy with the SEC,” she said.

Valte though assured the public that the Department of Trade and Industry has always been on top of the situation, since they have always been monitoring if there are unscrupulous businessmen taking advantage of the situation.

Meeting with the transport groups

At the same time, Malacañang announced over the weekend that President Aquino wants to meet leaders of transport groups next week to discuss the looming series of oil price increases, following complaints the government did nothing to stop them.

Valte told reporters in a briefing the “lead coordinating agency” in the proposed dialogue is the Department of Energy.

“We will be awaiting confirmation on when will the meeting be held,” Valte said.

She said the meeting with the transport sector would be held definitely before the President leaves for US and Japan, where he will be on a working visit to the country’s two major trading partners.

Valte said the President wanted to hear the complaints directly from them.

“The aim of the meeting is for the President to listen to them and to hear their concerns and see if there are solutions to address their concerns,” she said.

Valte denied insinuations the dialogue was a result of grievances of drivers of public utility vehicles in the wake of revived oil price increases, and perceptions that the government is really helpless in trying to cushion the impact.

She also downplayed speculations the planned dialogue could have been the brainchild of some members of Aquino’s cabinet, particularly those whose agencies have something to do with ensuring that prices of oil remain low and affordable.

“It’s the President who wants to meet with them (transport leaders). The aim of the meeting is for the President to listen to them and to hear their concerns,” Valte said.

The Aquino government would want to hold a dialogue first before offers – should there be any – could be made.

“We cannot say for sure at this point, we do not know exactly what concerns the transport groups would raise before President Aquino,” she said.

Taxing the middle class

Meanwhile, Sen. Ralph Recto warned of a possible backlash if the Aquino administration will proceed with its plan to impose value-added tax (VAT) on the South and North Luzon tollways and withdraw government subsidy on the mass railway transit system.

Recto said the VAT on tollways could be considered as a new form of taxes.

Recto said the middle-class earners –who have been paying taxes –would be pushed to the wall with the simultaneous increase of fuel prices, electricity rates, train fares and basic commodities.

Rather than giving the burden to the middle class workers, Recto said the government should better look into the tax incentives given to big companies who earn out of the country’s economy and yet they are not paying enough taxes.

Senate President Juan Ponce Enrile added oil companies should also impose windfall taxes, a position further intensified by the decision of Sen. Antonio Trillanes IV to file a resolution urging his colleagues to support his bill on the imposition of windfall taxes on oil companies.

Enrile said the government may not be able to do anything on the market movements of world crude prices, but it can look into the books of oil companies.

Enrile filed a resolution to push for the passage of the anti-trust law while blaming the past administrations for the enactment of the Oil Deregulation Law and the sale of government shares in Petron, which had served as a gauge to determine the real prices of oil in the world market.

On the other hand, Recto said the apparent neglect of President Aquino and his economic advisers to take into consideration the plight of the middle-class income earners in the country is a recipe of public unrest and possibly economic meltdown.

Recto stressed the middle class fuels the economy.

“The best way to raise revenue is by growing the economy. If the growth of the economy is good, the government is able to collect better taxes. That is the best way. And clearly the best way not to grow the economy is to hit the middle class,” he said.

Once the middle class workers are directly affected, Recto said the economy will slow down because consumers – who are mostly from middle class earners – will have less and less money to spend for their basic needs.

Recto added the growing concern of lawmakers on the administration’s plans to impose VAT on toll and withdraw the subsidy on MRT and LRT rates.

Senators Manuel Villar Jr., Joker Arroyo and Ramon Revilla Jr. are questioning the impending government decision on the two issues, worsened by the increase in power rates.

Revilla said he is in favor of the proposed resolution in the Senate that would “suspend the impending imposition of fare hike on mass rail transit systems in Metro Manila.”

Revilla predicts a domino effect on the economy with the increase of fare rates in public utility vehicles and slow movement of labor force once the two plans are implemented.

While we understand that the entire nation must not pay for the subsidy of one region, Revilla said the President’s economic managers must also take into account that not all regular passengers of MRT and LRT are permanent residents of NCR only.

“There are also countless ordinary workers and employees from various regions who are just working in Metro Manila to support their families in the provinces; even small businessmen,” Revilla said.

He added there are many students from the provinces who head to Metro Manila to study.

However, the country’s 80 provincial governors supported the government in the LRT/MRT fare hike.

The 80-member strong League of Provinces of the Philippines (LPP) issued a statement of support and said the “time was ripe” for the implementation of the repeatedly postponed proposed hike in MRT and LRT fares.

LPP president and Mindoro Oriental Gov. Alfonso Umali said the plan for the riding public in Metro Manila to bear a bigger share of the burden of operating the three commuter train systems would benefit the local government units (LGUs) in the provinces.

“It is high time that the national government take cognizance of the plight of our countrymen outside of Metro Manila,” Umali said.

“As a former legislator, and having been participating in the yearly budget deliberations of DOTC, I know the fare hike is long overdue. As governor, I also know the importance of getting additional funds from the national government in order to implement development programs for my province,” he said.

Another former congressman, now Bohol Gov. Edgar Chatto also defended government’s plan for the fare hike.

“The government coughed up more than P70 billion for the past ten years to subsidize Metro Manila train passengers. I think that is more than enough,” Chatto said.

He said the countryside would greatly benefit if some of the funds used for the subsidy of the commuter train systems would be redirected to rural development. –-Delon Porcalla (The Philippine Star) with Christina Mendez, Rainier Allan Ronda