[PHOTO AT LEFT - ENVIRONMENT-FRIENDLY: President Arroyo with her granddaughter Eva Victoria ‘Evie’ Arroyo ride around the Malacañang grounds yesterday in a hybrid Toyota Prius car driven by her son Dato. Photo by WILLY PEREZ]

MANILA, May 3, 2006 (STAR) By Aurea Calica - President Arroyo tried out for size a Toyota Prius hybrid car yesterday in a bid to advertise its environment-friendly and fuel-saving aspects – notwithstanding the car’s rather uneconomical price.

The President took interest in driving one of the hybrid cars herself after they were presented to her by Energy Secretary Raphael Lotilla at the Kalayaan grounds in Malacañang.

Lotilla explained Mrs. Arroyo took one of the cars to promote its use and highlight the need for fuel and energy conservation in the face of runaway prices of world crude.

"She (the President) said she’s taking the car from me so she would be able to use it during certain functions where it would be appropriate," Lotilla said.

The Toyota Prius was among the hybrid vehicles donated to the President in 2004 and which she allowed then Energy Secretary Vincent Perez to use.

When the two cars were presented anew to her, Mrs. Arroyo took interest in trying it out to advertise its fuel-saving features.

The President’s youngest son, Dato, took the car for a test drive. He also showed interest in driving a Honda Civic hybrid vehicle which is among the fuel-saving vehicles donated to the government.

Dato took the wheel of the Toyota while his daughter, Eva, and the President stayed in the back seat.

Lotilla expressed hopes that Congress would immediately pass a bill reducing the excise tax on the importation of hybrid vehicles as well as those using compressed natural gas (CNG) and the so-called flexible fuel vehicles.

Another proposal is to cut the tariff on these imported vehicles from 20 to zero or one percent to encourage more people to purchase them.

Hybrid cars are being imported fully and thus remain expensive even if the President reduced the tariff on spare parts of these kinds of vehicles.

In the case of flexible fuel cars, only Ford Philippines made an initial P1-billion investment to manufacture the vehicles locally.

"Flexible fuel vehicles can run with up to 20 percent ethanol blend with gasoline," Lotilla said.

He said Honda could also provide flexible fuel vehicles by making changes in their hybrid cars using regular gasoline or diesel.

"Hybrid vehicles give you 30 percent savings (on fuel). Right now they cost around P500,000 more than the conventional vehicles but we are encouraging those who can afford to buy these vehicles to use them as their contribution to the economy as a whole," Lotilla said.

"And besides, it is also good for the environment because it uses less fuel. In terms of kilometers per liter, the conventional vehicles can run from 9.1 or 9.2 kilometers per liter whereas this hybrid can run for about 13 kilometers per liter," he said. Alternatives The government, through the DOE, is undertaking efforts to lessen the impact of increasing fuel prices on the economy and the consuming public.

Among the plans is to accelerate the use of alternative fuels.

The government also looks forward to commissioning Chemrez’s CME expansion plant in May to process 60 million liters of oil per annum.

At present, the country has an actual production of three million liters of CME per year. Just recently, the DOE also approved the accreditation of another CME product and manufacturer with another 600 metric tons of capacity located in Cebu.

But the government is also turning its focus to alternative fuels. Pursuing the production of bio-diesel, President Arroyo directed the Philippine National Oil Co. (PNOC) to undertake a joint venture with the military in planting Jathropa trees, which can be used for natural fuel.

On the other hand, the Department of Finance, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) were instructed to finalize the revenue guidelines for the importation of ethanol.

Pending the issuance of the guidelines, importation has been given the go-signal to help bring down gasoline prices. Local production of ethanol is expected to increase by 2007.

Malacañang earlier opened the possibility of suspending the imposition of the 12-percent value-added tax (VAT) on local petroleum products following the record highs of crude oil price in the world market.

After the economic advisers of Mrs. Arroyo balked at the proposal to suspend VAT on imported oil, Malacañang clarified it would only be "the last option," given its repercussions to the economy and the country’s credibility before the international community.

Lawmakers led by Sen. Ralph Recto urged Malacañang yesterday to study the use of its windfall revenues from the VAT for the grant of direct subsidies to the socially sensitive fuel products.

Recto gave the proposal while he expressed his opposition to proposals to reduce the tariff on imported oil.

Recto said the reduction of the tariff would correspond to a reduction of pump prices and may just end up benefiting the importing oil firms.

"I think that if you reduce tariffs on the importation of petroleum products, this may not necessarily reduce the prices of oil products but may even increase the incomes of oil companies," Recto said.

Recto explained the oil firms pay the tariff upon importation, aside from paying the VAT.

"You take away the tariffs, they won’t pay for anything anymore. Does it necessarily follow that they will reduce retail prices? Not necessarily," he added.

He said that the consumers, particularly the low-income households would stand to benefit more if the national government uses the windfall profits from the VAT to subsidize diesel, kerosene or liquefied petroleum gas (LPG).

Budget Secretary Rolando Andaya Jr. has reported to Congress that the government is expecting to collect an additional P26 billion from the VAT this year on top of the projected P75.79 billion.

The additional revenues would come from the higher VAT collections from the oil firms because of the increases in the prices of oil.

Andaya said that the windfall profits would be used to finance "high impact" projects.

"I would rather that we collect this tariff and determine what sector of the oil industry or consumers to subsidize," Recto said.

"Maybe we can keep these tariffs and maybe subsidize diesel, kerosene and LPG which will benefit the greatest number of Filipinos and the poorer sectors of society," he said. - With Marvin Sy

Chief News Editor: Sol Jose Vanzi

All rights reserved