Economic managers OK P1 billion fuel subsidy

by Elijah Felice Rosales – The Philippine Star, 26 Oct 2021

MANILA, Philippines — The government’s economic team has committed to transfer P1 billion to the Land Transportation Franchising and Regulatory Board (LTFRB) for cash grants to public utility vehicle (PUV) drivers hurting from soaring fuel prices.

The Cabinet-level Development Budget Coordination Committee (DBCC) made the announcement yesterday as it cited the need for support for the transport sector in overcoming the challenges posed by surging oil prices.

According to the DBCC, the cash assistance will benefit at least 178,000 PUV drivers across the country, specifically in buying petroleum products for the remainder of the year. The cash aid will be distributed under the LTFRB’s Pantawid Pasada Program.

The government will charge the P1 billion to unprogrammed appropriations under the “support for infrastructure projects and social programs” in the 2021 national budget.

The economic team’s decision indicated its resolve in keeping the excise taxes on fuel in the face of calls to suspend them.

A new round of fuel price hikes takes effect today – P1.15 per liter for gasoline, P0.45 per liter for diesel and P0.55 per liter for kerosene.

The Department of Transportation (DOTr) welcomed the release of the cash grants to LTFRB, an attached agency.

“The DOTr is one with the other government agencies to find means and measures that will help sustain the livelihood of affected drivers and operators in the transport sector especially during this time of the pandemic,” it said.

The Department of Finance (DOF) last week said it was against proposals to suspend fuel excise taxes as pushed by the Department of Energy (DOE), lawmakers and transport groups.

Suspending the excise taxes on petroleum products, the DOF warned, would translate to P24.7 billion in forgone revenues and P106.7 billion in incremental income in 2022.

Citing a possible loss of P131.4 billion, the DOF called on authorities – including the DOE – to look into the impact of the proposed suspension.

Energy Secretary Alfonso Cusi, for his part, said suspending the excise taxes on fuel can bring down pump prices by as much as P10 a liter.

Oil prices have been rising for at least two months now, putting pressure not only on PUV drivers but also on regular consumers.

According to think tank IBON Foundation, prices of diesel have gone up by P8.7, gasoline by P7.25 and kerosene by P8.1 in just the past eight weeks. As such, a jeepney driver has to shell out P95.70 more for 11 liters of diesel a day, while a farmer has to pay P1,653 more for 190 liters of diesel per hectare per cropping season.

Aid for fishers

The Department of Agriculture (DA) said it is coordinating with the DOE for the granting of fuel discounts to fishers.

At a virtual press briefing yesterday, Agriculture Undersecretary for fisheries, agribusiness, agro-industrialization and consumer affairs Cheryl Caballero said fishermen in the West Philippine Sea would be given priority.

“In our initial discussions, fishers in the WPS are the priority because we just want to make sure that their fishing activities are sustainable and one way of doing that is to support through the discount,” Caballero said.

She emphasized that fuel accounts for around 50 percent of production costs.

She said that based on talks with the DOE, around 30,000 municipal fishers and 938 commercial fishers in the West Philippine Sea are targeted for coverage of the fuel discount.

She added that talks with the DOE are ongoing, particularly on the mechanisms for proper distribution of the discounts.

Caballero said the DOE is also in talks with fuel companies such as Pilipinas Shell Petroleum Corp., Petron Corp., Caltex and Phoenix Petroleum Philippines, among others, regarding the fuel discount.

“This is being orchestrated by the DOE. So their discussions are continuous,” Caballero said.

Discounts, subsidy

For his part, Sen. Bong Go has urged the DOE, DA and DOTr to study the possibility of offering fuel discounts and subsidy for public transport and other strategic sectors like food deliveries.

In a statement, Go expressed belief that by giving these benefits, concerned government agencies would be able to help Filipinos cope with their financial burdens due to rising oil prices.

“Aside from giving relief to ordinary commuters, fuel discounts and subsidies can also help control possible rise in the prices of food and other basic necessities which need to be transported from producers to markets and consumers,” he said in Filipino.

Go also called for the possibility of amending pertinent law to allow the temporary suspension of fuel excise tax at times when world oil prices surge.

“As part of the government, we are mandated to find ways to ease the burden of the people, especially now that we are trying to overcome a crisis. Let’s not add to their burdens,” he said.

He also stressed that continuing projects to strengthen the country’s mass transportation infrastructure would be critical in guaranteeing that Filipinos can travel quickly and comfortably despite the ongoing challenges.

“Let’s protect the lives and livelihood of Filipinos, fight poverty and hunger and continue the change toward a better life. No Filipino should be left behind in our quest for total recovery from this pandemic,” he added.

No fare hike

At a Senate sub-committee budget hearing yesterday, the DOTr said it is ruling out fare hikes but will roll out programs to cushion the impact of successive fuel price increases on drivers and operators of PUVs.

“The position of the department, including the LTFRB, is that there should be no fare hike as of this time and that it is better to look for other means to help our PUV drivers,” Transportation Secretary Arthur Tugade told the Senate finance subcommittee chaired by Sen. Grace Poe.

“We are not in favor of fare hikes because commuters have nothing to do with fuel price increases,” DOTr Undersecretary Steve Pastor said.

On the issue of suspending fuel excise taxes, Tugade said the matter is better handled by the DOF.

Pastor also said the Tax Reform for Acceleration and Inclusion also provides for benefit programs for PUVs, although he admitted funding for such apparently is not yet available.

Sen. Imee Marcos lamented that the DOTr is still in the stage of conducting meetings even if fuel prices have already been rising over the past nine weeks.

“There seems to be no sense of urgency,” Marcos said.

Sen. Nancy Binay said the DOTr should also fast-track the implementation of the increase in seating capacity to help PUVs earn more.

Pastor said the raising of seating capacity in PUVs is set to be tackled in the meeting of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) on Thursday.

For the militant Bagong Alyansang Makabayan (Bayan), suspending the excise tax on oil products would ease the suffering of PUV drivers from recurrent fuel price hikes.

“This is an urgent call. The VAT should also be reduced or eliminated because the higher the oil prices, the more VAT is collected,” Bayan secretary-general Renato Reyes said.

“Government profits from the misery of the people. The people are suffering because of the pandemic, and now we have these uncaring people from the government and monopolies,” he said.

“The people demand immediate relief from rising petroleum prices. Pressure should be directed at President Duterte to act on the runaway oil prices.” – Paolo Romero, Catherine Talavera, Richmond Mercurio, Rhodina Villanueva, Danessa Rivera, Ric Sapnu