GOV'T  MOVES  TO  CUSHION  THE IMPACT OF OIL PRICE HIKES AND EVAT

MALACAÑANG, August 18, 2005
 (OFFICE OF THE PRESS SECRETARY) The Arroyo administration has put in place several measures that would cushion the impact of the unabated oil price hikes and the implementation of the Reformed Value Added Tax (VAT) Law on the Filipino people.

Emerging from a "long session" this morning to explore feasible measures that would address the looming oil crisis and the impending implementation of the Reformed VAT Law in September, President Gloria Macapagal-Arroyo’s economic team stressed in a subsequent press briefing that the government is "sensitive to the concerns of the general public."

Among these measures are the move of Congress to incorporate into the Reformed VAT Law the scrapping of the excise tax on diesel, kerosene and bunker fuel oil and the zero-rating of the sale of power or fuel generated through renewable sources of energy such as geothermal, hydro and solar energy.

The Department of Energy (DOE) said renewable sources of energy account for nearly half or 43 percent of the country’s total energy supply.

As soon as the Reformed VAT Law is implemented, Executive Order 440 takes effect, thus reducing the import tariff on petroleum products from five percent to three percent, except for liquefied petroleum gas (LPG), which will remain at zero.

The Department of Trade and Industry (DTI) has reactivated its Price Monitoring Council to closely monitor the prices of consumer goods to minimize any irregular price movements.

Trade Secretary Peter Favila said he is holding dialogues with various manufacturing and industry associations to ask them to keep their prices steady until their existing inventory is consumed.

The Department of Agriculture has provided additional rolling stores so the people will have easier access to agricultural products, and has made available free "cold chain facilities" to reduce postharvest costs.

The DA has also offered minimally processed vegetables at affordable prices to consumers at P25 for half a kilo of pinakbet or chopsuey and has recognized markets that encourage affordable pricing.

The Department of Energy has instituted various fuel and electricity conservation measures to be implemented both in government and the private sector.

These measures include instituting an organized bus route program, in coordination with the Metro Manila Development Authority (MMDA), and implementing alternative fuel programs such as the use of bio-diesel, ethanol fuel, natural gas for transport.

The DOE is also working with MERALCO to institute a power factor improvement program for government agencies. The program would install equipment in government offices that would significantly reduce their energy consumption.

Palace drafting energy conservation bill (OFFICE OF THE PRESS SECRETARY, MALACANANG)

Energy Secretary Raphael Lotilla today disclosed that Malacanang is drafting a bill patterned after Batas Pambansa Blg. 73 for passage by Congress to help strengthen the country’s energy conservation initiatives in the light of the continuously spiraling oil prices in the world market.

In a press briefing by President Gloria Macapagal-Arroyo’s economic team in Malacanang this afternoon, Lotilla said BP 73, otherwise known as an Act to Further Promote Energy Conservation, has become urgently relevant to the obtaining fuel and energy situation.

Among the salient provisions of BP 73 signed into law by the late President Ferdinand Marcos on June 11, 1980, was the setting up of standards of energy consumption for oil-powered or electric-driven equipment, appliances, devices and vehicles.

The law also required industrial, commercial and transport entities to cause the collection of waste oil for recycling as fuel or lubricating oil; and submission of annual reports of fuel and electric consumption and sale statistics for firms consuming over one million liters of oil to properly monitor energy consumption and utilization efficiency.

BP 73 likewise banned the use of neon lights and electric lights for commercial advertising earlier than 6 p.m. and beyond 9 p.m. except during the Christmas season; excessive lighting of shopping complexes, hotels, motels and similar commercial establishments.

It also prohibited the importation or assembly of gasoline-powered passenger motor cars with engine displacement of over 2,800 cubic centimeters.

In response to the looming oil and energy crisis, Lotilla said the DoE will institute various fuel and power conservation measures, including the organized bus route program and use of non-oil products like coco bio-diesel fuel, ethanol, natural gas and liquefied petroleum gas (LPG) for transport.

He said they also plan to establish a Power Factor Improvement Program for government agencies, in cooperation with the Manila Electric Company (Meralco), to install equipment that would significantly reduce electricity consumption.

President Arroyo has just signed Administrative Order No. 126 that now requires all government agencies to reduce, by at least 10 percent, their electricity and fuel consumption.

AO 126 states that it is "imperative that measures be immediately adopted to minimize, if not forestall, any adverse effect of the world prices of oil on the country’s economy."

The AO likewise prohibits all government agencies and offices from using vehicles, aircraft and watercraft for "purposes other than official business," except for those used by intelligence agencies of government.

Government offices with adequate ventilation were likewise ordered to refrain from using air-conditioning facilities, especially during the cooler months from August to February.

"The government would lead the way in conserving energy. As for the private sector, it would be on a voluntary basis," Lotilla said.


Reported by: Sol Jose Vanzi

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