For the fourth straight week, oil companies rolled back the price of petroleum products. Flying V led the latest round of price cuts, reducing the price of diesel by P0.30 a liter and gasoline by P0.50. Other oil players are expected to follow suit. The Department of Energy (DOE) said that the rollback is due to the stronger peso which offset the increase in global oil prices.
Compared to their end-2011 levels, pump prices this year are still higher by P1.84 per liter for diesel and by P4.40 for gasoline due to the series of price hikes until mid-April.
Local overpricing
But more notably, oil products are still overpriced despite the rollbacks. As of March 2012, diesel is overpriced by around P7.86 per liter and gasoline by P16.18 per liter.
These are based on the monthly movement of Dubai crude and foreign exchange (forex) rate and their estimated impact on the pump price based on a rule of thumb being used by one of the major oil firms.
The estimated impact on the pump price, using the said rule of thumb, varies depending on the respective levels of Dubai and forex in a given month. For instance, in March, Dubai averaged $122.36 per barrel while the forex was pegged at P42.86 per dollar which translates to an estimated impact of P1.20 per liter on local prices for every one dollar increase in Dubai price and for every one peso increase in the forex rate. (See Table 1)
The estimated impact is then compared to the actual adjustments in the pump price. The difference (i.e. when the actual adjustment is bigger than the estimated impact) is considered the “overpricing”. There is “underpricing” when the estimated impact is bigger than the actual adjustment.
The P7.86 per liter for diesel and P16.18 for gasoline represent the accumulated overpricing from January 1999 to March 2012, or the whole period under the 1998 Oil Deregulation Law (ODL). (See Table 2)
Other estimates
Other estimates also show that oil firms are overpricing their products as they take advantage of automatic price adjustments under the ODL. Think tank IBON Foundation, for instance, estimated that diesel prices are increasing 20-22% faster than Dubai crude prices since 1999. Former National Economic Development Authority (NEDA) chief and now Senator Ralph Recto also testified before a Manila court that overpricing could reach P8 per liter.
Global monopoly pricing and speculation
These (local) overpricing estimates simply illustrate that local pump prices increase higher than what movements in global oil price and forex warrant (or smaller in case of rollbacks). They do not represent yet the effect of global monopoly pricing and speculation.
Of the $122.36 per barrel March average of Dubai crude, $78.66 to $92.49 represents monopoly profits and speculation. These estimates are based on US Energy Information Administration (EIA) data that the finding cost of crude oil is only $6.99 to 18.31 a barrel, the lifting cost is only $5.75 to 8.26 a barrel, and royalty is 14% of the posted price ($17.13 based on the March average of Dubai). Thus, to produce a barrel of Dubai crude, the total cost is just $29.87 to 43.70 a barrel.
Review body
The so-called Independent Oil Price Review Committee (IOPRC) set up by the DOE should be looking into these claims. This body is supposed to “study the alleged accumulation of excessive profits by oil companies resulting in grossly unfair pricing”.
It has been conducting “consultations” with people’s organizations to better carry out its mandate, so they say. But its last meeting with members of the Coalition Against Oil Price Increases (CAOPI) ended up as a debate for the most part. The IOPRC headed by staunch neoliberal economist Benjamin Diokno insisted on the parameters imposed on it by the ODL. Diokno, for instance, refused proposals to probe supply contracts and other documents that are key to the determination of excessive profits and overpricing.
Direct action
The lone point raised by CAOPI seemingly agreed to by the IOPRC in that meeting was the change in venue. If the review body is independent, it should use a neutral venue and not the premises of the DOE whose officials are often accused of speaking in behalf of the oil firms. Alas, even that very minor point apparently has not been heeded as consultations tomorrow (May 7) will still be held inside the DOE compound.
Then again, it would be wrong to pin our all our hopes on the IOPRC, whose members have displayed strong bias to the heartless market. Even as groups like CAOPI engage the IOPRC as well as Congress, the best prospects to end overpricing and the abuses of the oil firms and the ODL that perpetuate them still lie in the people’s direct political action. (end)
On May 4, activists from the multisectoral group Bagong Alyansang Makabayan (Bayan) trooped to Roxas Boulevard in Manila to protest the ongoing 45th meeting of the Asian Development Bank (ADB).
(Read Bayan’s news release here, and more about the ADB and its role in Philippine maldevelopment here and here)
The Asian Development Bank (ADB) is holding its 45th annual meeting from May 2 to 5 in Manila. Some 4,000 delegates including finance ministers and central bank governors from ADB’s member-countries; as well as representatives of big business, international financial institutions (IFIs), transnational banks, credit rating agencies, global media, and even so-called civil society are attending the said event. With the theme “inclusive growth through better governance and partnerships”, the event will mark the 15th time that the ADB has held its annual meeting in Manila. Venues have been arranged at the Philippine International Convention Center (PICC).
The ADB was founded in 1966 and now has 67 members. It’s one of the global financial institutions set up by the industrial powers to fund their programs and projects in backward countries. Together with the International Monetary Fund (IMF), the World Bank and other IFIs, the ADB bankrolled numerous restructuring efforts that aim to liberalize, deregulate and privatize the economies of many countries in the Asia Pacific. These reforms have been implemented through huge and burdensome debts. The Philippines is a founding member of the ADB and has been hosting the bank’s main headquarters since its inception.
ADB’s 45th meeting is an opportune time for the Filipino people to register its strongest condemnation of the multilateral bank that has been funding numerous anti-poor economic reforms and destructive projects in the country.
Neoliberal offensive in energy
In the Philippines, ADB’s disastrous impact is most felt in the energy sector through the Electric Power Industry Reform Act of 2001 (Epira) and the neoliberal reforms implemented in the sector in the past two decades. The ADB started funding the power sector reforms through loans and equity investments to independent power producers (IPPs) as well as guarantees for bonds issued by the National Power Corp. (Napocor). Due to sweetheart deals with the IPPs, Napocor further went deeper in debt, which the ADB used to justify its total privatization.
As Napocor’s largest creditor, the ADB aggressively pressured the national government to fully privatize the state-owned power firm and enact the Epira. In 1994, it funded a study that eventually became the basis of the then Ramos administration’s blueprint for power sector restructuring. This blueprint took the form of an Omnibus Power Bill that was filed in 1996 that aimed to privatize Napocor and restructure the power industry. The Omnibus Power Bill would later become the Epira, a process that was bankrolled by the ADB’s $300-million 1998 Power Sector Restructuring Program (PSRP). To access the loan, the ADB listed 61 specific conditionalities that the government should follow, including designing content and legislation of the Epira.
Even Epira’s actual implementation is being funded by the ADB. Since 2002, the ADB has approved an estimated $1.3 billion in loans to support the various programs and projects under Epira. These include debts to guarantee the bond issuance and improve the creditworthiness of the Power Sector Assets and Liabilities Management Corp. (Psalm), which Epira put up to oversee the privatization of Napocor, and establish the wholesale electricity spot market (WESM).
Under Epira, electricity bills have soared amid energy insecurity such as the case in Mindanao. According to one study, the power rates for residential users in Manila and Cebu are the first and third most expensive in Asia, respectively. Even the supposedly “cheap” electricity rates in Mindanao are still much more expensive than the rates in more progressive Asian cities like Hong Kong, Beijing, Kuala Lumpur and Seoul. Since Epira was implemented, the rates of the Manila Electric Co. (Meralco) have jumped by 112% while the rates of the Napocor have increased by 95 percent.
Meanwhile, the lack of energy security is the result of government’s abandonment of its mandate to invest in the rehabilitation of existing plants and construction of new ones. Instead of ensuring that there is enough energy supply consistent with a long-term industrialization plan, government used its time and resources to dispose the generation and transmission assets of Napocor as mandated by Epira.
Anti-poor reforms
Aside from the neoliberal restructuring of the power sector, the ADB has also aggressively promoted various privatization and commercialization initiatives including in water utilities, irrigation, dam, and the National Food Authority (NFA), among others. These reforms have resulted in food insecurity and in skyrocketing cost of living.
Privatization is one of the major programs of the ADB in the Philippines, including the public-private partnership (PPP) initiative of the Aquino administration. ADB is the main funder of the Project Development and Monitoring Facility (PDMF), which is government’s revolving fund for feasibility studies for projects under the PPP scheme. The ADB has already committed $21 million for the PDMF.
Furthermore, the ADB also bankrolled a 1993-1994 study that became the basis of the destructive Mining Act of 1995. This program, which liberalized the Philippine mining industry, has paved the way for the further wanton plunder of the country’s mineral resources, the destruction of the environment, and dislocation of communities.
Oppressive debt
Worse, these anti-development and anti-poor programs have been funded by onerous ADB loans. The ADB is now the country’s single largest foreign creditor. As of 2011, the country owes the ADB around $5.84 billion, which is almost 10% of the total foreign debt of the Philippines pegged at $16.71 billion. Among the multilateral creditors, the ADB accounts for more than 50% of the country’s total multilateral debt. All in all, the country has accumulated the fifth largest debt from the ADB, accounting for about 8% of total sovereign lending.
Due to automatic debt servicing, a huge portion of the national budget is being siphoned off by debt servicing, leaving almost nothing for social services. For 2012, for instance, the Aquino administration is ready to spend P738.6 billion for debt servicing, including interest payments and principal amortization. This is much bigger than the P575.8 billion that government is willing to spend for education, social security, health services, housing, land reform, and other social services.
To smokescreen the harsh effects of the neoliberal reforms that it has been sponsoring and the lack of resources for social services due to debt servicing, the ADB – together with the World Bank – is also funding the conditional cash transfer (CCT) program of the Aquino administration. Under the CCT, government provides direct cash assistance of as much as P1,400 to selected poor families on the condition that pregnant mothers will have their regular checkup and school age children will regularly go to class. But aside from being highly temporary and limited, the CCT also further deepens the indebtedness of the Philippines. The ADB is funding the CCT to the tune of $400 million in loans while the World Bank is also lending $405 million for the program.
Strong protest
ADB’s theme of inclusive growth for its meeting this year reflects the main theme of the host government’s Philippine Development Plan (PDP) 2011-2016. Under the PDP, inclusive growth is supposed to be achieved by expanding the domestic economy by 7-8%, which will generate jobs and livelihood and alleviate poverty. But Aquino’s inclusive growth means the implementation of the same policies and programs of liberalization, deregulation and privatization that the ADB – together with the IMF, World Bank and other global imperialist institutions – has long been imposing on the country.
We should not let the ADB meeting pass without registering our strong opposition to its decades of intervention in Philippine policy making and to the many programs that it has bankrolled through odious debts that perpetuate the backwardness of our economy and the poverty of our people. (end)
The 2+2 meeting in Washington could lead to the establishment of more covert US “military bases” in the country such the bases being maintained by the JSOTF-P (Photo from jsotf-p.blogspot.com)
The 28th Balikatan exercises ended with the “usual thank yous”, said an Inquirer report. “As the curtain closes down on this year’s Balikatan, I would like to express my gratitude to the American soldiers… who gave their invaluable time to share their experiences…” General Jessie Dellosa, Chief of Staff of the Armed Forces of the Philippines (AFP), said during the closing ceremony.
First of its kind
But the curtain never truly closes for the US troops in the Philippines. Because while the Balikatan has already been concluded, the supposedly visiting American soldiers will not leave. About 600 of them – perhaps even more – will continue to stay in the country as part of the Joint Special Operations Task Force – Philippines (JSOTF-P), established under the 1999 PH-US Visiting Forces Agreement (VFA).
And when the so-called 2+2 meeting on April 30 is over, we could be seeing more US troops – maybe thousands – deployed, on so-called “rotational” basis, on our shores soon. The 2+2 meeting, which will be held in Washington, is described as “the first of its kind” in Philippine-US relations. To underscore its significance for the country, the Department of National Defense (DND) said that the US has had similar meetings only with Japan and South Korea, America’s most reliable allies in East Asia.
And while the meeting that will be attended by DND Secretary Voltaire Gazmin, Department of Foreign Affairs (DFA) Sec. Albert del Rosario, US Defense Sec. Leon Panetta and State Sec. Hillary Clinton will also discuss economic and political cooperation, what everyone is anticipating are details of how Manila and Washington will strengthen military relations.
Chinese assertiveness
The military aspect of the upcoming talks has generated increased public interest due to the ongoing Scarborough Shoal standoff between the Philippines and China. Filipino and American officials, abetted by the local mainstream media, have used the perceived Chinese bullying to highlight the supposed potential benefits for the Philippines of deepened military relations with the US.
China’s assertive stance in its dispute with the country over the Scarborough Shoal and the Spratly Islands is being used to justify increased US military presence and intervention in the Philippines and in the region. While this serves US’s agenda in Asia Pacific, it also raises further risks to peace and development in the region and to the national sovereignty of the Philippines. (Read more on this here)
Sustaining global presence
Meanwhile, one of the expected results of the 2+2 meeting is the conduct of more frequent and bigger joint military exercises and the deployment of more US troops here like those under the JSOFT-P. This is consistent with the latest defense strategy of the Obama administration. As I have written in a previous post:
Updating existing military alliances and forging new ones, however, have to be pursued in the midst of the harsh economic realities facing the US. Amid its raging public debt crisis that has been caused in part by costly wars in Iraq and Afghanistan, the Obama administration released this month its latest defense strategy document Sustaining US global leadership: Priorities for 21st century defense. The document was the result of “an assessment of US defense strategy in the light of the changing geopolitical environment and changing fiscal circumstances”.
Consequently, the latest US defense strategy calls for developing “innovative, low-cost and small-footprint approaches” to achieve US security objectives, relying on bilateral and multilateral training exercises, rotational deployments and advisory capabilities. This will allow US forces to “conduct a sustainable pace of presence operations abroad” and at the same time let it commit to a large-scale operation in one region while still having the capability to impose “unacceptable costs” on an aggressor in a second region.
New types of bases
To house the additional troops, the 2+2 meeting could lead to the establishment of more covert US “military bases” in the country such as Forward Operating Sites (FOSs) and Cooperative Security Locations (CSLs). These types of bases are much smaller than traditional US foreign military bases.
The US Overseas Basing Commission, the official body tasked to review US military basing in other countries, describes FOSs as “expandable ‘warm facilities’ maintained with a limited US military support presence and possibly prepositioned equipment; it supports rotational rather than permanently stationed forces and be a focus for bilateral and regional training.” CSLs, on the other hand, are “facilities with little or no permanent US presence. Instead they will be maintained with periodic service, contractor, or host-nation support. CSLs will provide contingency access and be a focal point for security cooperation activities.” For US strategic planners, the expansion of FOSs and CSLs in key locations worldwide “adds to operational flexibility, preserves a presence abroad, and serves to strengthen alliance relationships.”
Essential for US operations
In the Philippines, the headquarters of the JSOTF-P inside Camp Navarro in Zamboanga City where it has based since 2002 is considered an example of an FOS or sometimes referred to as forward operating base (FOB) in some US military papers. Read, for instance, a 2004 monograph on Army special operations forces, which used Operation Enduring Freedom (OEF-P) in Mindanao as a case study. The OEF-P was pushed by then President George W. Bush supposedly to combat the Abu Sayyaf and covers Mindanao as its area of operation (AO).
As narrated in the monograph, the Joint Task Force (JTF)-510 – JSOTF-P’s predecessor – “set up an FOB on the southern tip of the Mindanao Island near Zamboanga City”, specifically the Edwin Andrews Air Base (EAAB) because “basing was essential for OEF-P”. It also described the role of an FOB in US military operations: “The FOB at EAAB was the logistical hub within the AO for all operations. All US forces flowed in the FOB before conducting operations… From Okinawa, all assets and personnel flew into the JTF’s AO via the FOB at EABB on Mindanao. FOB EAAB served as a transloading point, logistical hub for the forces on Mindanao and Basilan, and housed air assets.”
Covert bases
The location of these bases is not willingly disclosed to the public by authorities in an effort not to attract too much attention to the presence of US troops as well as to undercut criticisms against US military basing in the Philippines which is a violation of the Constitution. Even so, US military documents such as the monograph cited earlier would confirm the existence of US bases in the Philippines.
Another such document is the 2005 report of the US Overseas Basing Commission, which disclosed that: “A series of CSLs are being developed in India, Thailand, Philippines, and Australia that will be able to provide logistics arrangements for support throughout the region. Many of these will simply be fueling arrangements and perhaps some pre-positioned stocks.” The Philippine government, however, has not confirmed the existence of these CSLs, much less disclose their locations.
But in an August 2009 affidavit, former Philippine Navy Lt. Sr. Grade Nancy Gadian revealed that since 2002, the US has established “permanent and continuous presence” in southern Mindanao as she identified possible CSLs in Zamboanga City, Sulu, and Tawi-Tawi. The table below summarizes her testimony describing the location and features of US presence/basing in Mindanao.
It was also Gadian who exposed the anomalous use of P46 million in Balikatan funds by high ranking AFP officials. She was the officer in charge of the Civil Military Operations (CMO) Fusion Cell for Balikatan 2007. In 2001, Gadian was one of the planners of the Balikatan 2002 (held in Pampanga) and of Balikatan 2002-1 (held in Mindanao).
Violates sovereignty
Aside from those identified by Gadian, another possible CSL is located inside Camp Ranao in Marawi City, Lanao del Sur which was unknown to the public until the reported death of Gregan Cardeño, an interpreter hired by the Americans for an elite unit of US Special Forces called the Liaison Coordination Elements (LCE). Cardeño died on Feb. 2, 2010 under dubious circumstances, telling relatives before his death that his job “was hard and not what he expected”. Less than two months later, Capt. Javier Ignacio of the Philippine Army – a friend of the Cardeños helping to shed light on his death – was shot dead by still unidentified gun men.
Certainly, there are many other military facilities set up and being used by US troops in the Philippines, including in Luzon and Visayas, which the public does not know. But their number could further increase as Philippine-US military relations further deepen in the coming years. This blatantly violates Philippine sovereignty and an infringement of the Constitution which does not allow the basing of foreign troops in the country.
Consequently, more atrocities involving American soldiers such as the case of Cardeño could arise. Just recently, another Filipino died – fisherman Ahbam Juhurin – in what was a supposedly “sea mishap” involving US troops conducting “routine maritime activity” in Basilan. While some may argue that this latest incident was just an accident, Juhurin’s death still raises a fundamental question – why do we allow US troops to base in our country and patrol our seas, lands, and air? (end)
The Silverio Compound demolition in Parañaque City was the most brutal in recent memory, leaving at least one dead and some 36 hurt, mostly by gunshot wounds. Some 33 residents and protesters were also arrested, including seven minors and two women. Twenty-nine of them were eventually charged with resistance and disobedience to a person in authority and disturbance of public order. While some of the wounded were brought to various hospitals, many others refused to seek proper medical attention out of fear of being arrested or simply due to lack of money.
Negotiations
On April 23, residents blocked certain portions of Silverio Compound as early as 5 a.m. The main barricade was set up at Purok 4, which fronts the SM Hypermart. By 7 AM, five 6×6 trucks each carrying 30 to 40 policemen from the Parañaque City Civil Disturbance Management Unit (CDMU) along with two fire trucks began arriving in the area. They were backed by several members of the police’s Special Weapons and Tactics unit (SWAT) who were armed with high-powered assault rifles. By around 7:30 AM, many residents had already occupied Sucat Road, which was meant to cause traffic and delay the demolition. A demolition team of some 50 men arrived at about 8 a.m.
Initial findings of the emergency fact-finding mission (FFM) conducted by the Bagong Alyansang Makabayan (Bayan) several hours after the bloody incident show that members of the CDMU provoked the violent confrontation. Prior to the hostility, leaders of the residents and local politicians Cong. Edwin Olivarez, former Cong. Ed Zialcita, and Councilor Eric Olivarez were negotiating with the police (talks began at around 9 a.m.) to suspend the demolition as the Silverio compound is the subject of a pending court case. The CDMU, on the other hand, was asking the protesters to free up a portion of the road to let vehicles pass.
Gun shots
Despite ongoing negotiations to suspend the demolition and willingness of residents to heed the police’s request to allow traffic flow, the CDMU prepared to turn toward the direction of the protesters at past 10 a.m. Witnesses also said they saw men secure the local politicians, which indicated that the police was getting ready to move. Thinking that the CDMU was about to disperse them, the residents started to hurl stones at the police. Eventually, the police responded by firing teargas toward the direction of the protesters. Accounts claimed that the police fired more than 10 teargas canisters.
The CDMU and SWAT members were forced to backtrack a bit but moments later, gun shots were heard, apparently fired by the police, sporadic at first and then in succession. The string of gun shots forced protesters to back down and run away while the CDMU and SWAT teams advanced and began arresting people. One person – later identified as 21-year old Arnel Leonor, a resident of Silverio Compound – was seen lying on the pavement, with what appeared to be a fatal gunshot wound in the head. He was brought to a hospital by the police many minutes later but was declared dead on arrival.
Violations galore
The atrocities committed by the police did not end in the indiscriminate shooting of the residents that killed Leonor and wounded others. Many of those who were already apprehended or subdued were still assaulted by the angry police. They were truncheoned, punched, kicked and slapped at whim by the arresting officers. These were captured by the media who were covering the incident. Worse, the arrests were arbitrary; the police picked up anyone they wanted. Some of those arrested and assaulted by the police were mere onlookers. They said they did not run away because they did not participate in the protest and thus thought will not be arrested, much less assaulted by members of the CDMU.
Arbitrary house-to-house searches were also carried out by the police to look for more people to pick up. Witnesses claimed that some police officers again fired their guns during these house searches. The demolition team, meanwhile, pushed through with the demolition of several stalls and houses.
Private profits over public housing
This bloody incident could have been prevented had Mayor Florencio Bernabe respected the original agreement between Silverio Compound residents and former Mayor Joey Marquez that the entire 9.7-hectare property will be used for socialized housing. This means that the 28,000 families occupying the property will just amortize the land to the Parañaque City government. It was Marquez who, in 2003, initiated the expropriation proceedings by virtue of an ordinance against Silverio Compound’s private owner Magdiwang Realty Corp. But Bernabe changed the plan, reduced the size for socialized housing to 3 hectares, and pushed for the construction of 32 medium-rise condos that can only accommodate some 1,900 families.
Bernabe is pushing for a public-private partnership (PPP) project for Silverio Compound, eyeing big developers including SM Development Corp. (SMDC) to build the medium-rise buildings and other infrastructures in the area. The remaining 6.7 hectares of the property will also be devoted for commercial development in a bid to entice private investors in the city. Clearly, this is a case of the local government prioritizing private profits over the people’s basic right to shelter.
Impunity
The blatant disregard for human rights displayed by the police involved in the incident speaks volume of how deep the culture of impunity has been ingrained among our law enforcers and security forces. To end this culture of impunity, those who are involved, directly and indirectly, and not only members of the SWAT and CDMU but even police and civilian officials, in the tragic Silverio Compound demolition must be held liable.
What is alarming is that recent developments point to the regrettable possibility of a whitewash. National officials, for instance, are now seemingly conditioning the public mind that Leonor could have died from a bullet fired by one of the protesters. Supposedly, one of those arrested tested positive for gunpowder. Only an independent probe of the incident, including a re-autopsy of Leonor’s body by an independent party, could provide a more credible finding.
There is no doubt that the police used excessive force in enforcing the demolition order. Their abuses have been well-documented by media outfits who covered the incident and their identities could be easily established. Bernabe, on the other hand, clearly abused his power in insisting to implement the demolition. There are more than enough grounds to immediately make these people accountable.
Call for support
While the residents of Silverio Compound remain undaunted by oppression and brutality, they need all the support that they can muster to ensure that justice will be served. At the same time, they also need assistance – medical, legal, etc. – to help them cope with the tragedy inflicted on them by institutions that are supposed to uphold their rights and promote their interests.
The people of Silverio Compound, like those in other urban poor communities who have been dislocated or threatened by PPP projects that only profit the few, are fighting not only for their homes but for their right to live as human beings. All those who value this very fundamental human right could not allow them to fail. (end)
Written for Paninindigan, Bayan’s official publication (click here)
Above is an infographic on the presence of US military in the country during the last decade since it launched its so-called war on terrorism.
The United States (US) recently declared a foreign policy pivot toward Asia involving greater economic, political and military engagement in the region. The shift however started as early as 2001 when its Quadrennial Defense Review proclaimed a shift to Asia and a corresponding increase in the US military presence through fixed bases, rotational deployments, training exercises and logistical arrangements.
The US called the Philippines its “second front [in the war on terrorism]” in January 2002 and has dramatically built up a nationwide military presence since then. The US military has made extensive use of the Visiting Forces Agreement (VFA) to station some 600-700 special forces troops in the country and to bring in as much as 7,000 other soldiers at a time on so-called joint exercises, civil-military actions and relief operations. It has also used the Mutual Logistics and Support Agreement (MLSA) to establish military outposts and access war materiel for its forces.
The whole archipelago has been transformed into a US military base, which violates Philippine sovereignty and the 1987 Constitution.
(When citing this article, please credit IBON Foundation and not the blogger. Thank you.)
Read more about US military intervention and presence in the Philippines:
Mindanao power is more expensive than electricity rates in major cities in Asia but Aquino wants the region to pay more to supposedly address its power crisis (Photo from manilastandardtoday.com)
Mindanao must pay more to end the rotating brownouts, the President declared in his Power Summit speech. The region, said Aquino, needs more power supply but “cheap” power rates are discouraging private investors from building new power plants to meet Mindanao’s growing energy needs.
Pay more
“But how can you entice anyone to invest—and this is the question—if their generating cost is more than their selling cost?” Aquino, in his speech, asked. “The simple truth is: we can have a lot more energy, but we have to provide the incentives for businesses to come here to put up those plants. Therefore, there will be a change in what we have to pay. We will have to pay, perhaps, a bit more…You have to pay more because this is the reality of economics… Everything has its price. We have to pay a real price for a real service. There are actually just only two choices: pay a little more for energy, or live with the lack of energy and the continuation of the rotating brownouts.”
Cheap rates?
Aquino must apologize to the people of Mindanao for blaming them for the power crisis and accusing them of being spoiled by “cheap” power rates. Aquino must apologize for being shamelessly insensitive to the plight of Mindanao where 36% of the country’s poorest families live (based on the latest official poverty statistics released by the National Statistical Coordination Board or NSCB).
The premise that Mindanao has been unjustifiably enjoying “cheap” power rates is totally wrong. True, Mindanao has lower power rates than Luzon and Visayas. Latest available comparative data show that the region has an effective residential rate of P6.69 per kilowatt-hour (kWh). Luzon has P9.84 while Visayas has P8.19. (Data from 18th EPIRA Implementation Status Report, which may be downloaded here)
Most expensive in Asia
Aquino, however, did not mention one very important fact. Mindanao power is “cheap” only because the country has the highest electricity rates in Asia. In a survey conducted by the Japan External Trade Organization (JETRO), Manila posted the most expensive residential rate (P10.16 per kWh), while Cebu (P8.39) is ranked third (Singapore ranked second with P8.83). JETRO conducted the survey in January 2011 to compare investment-related costs, including electricity, in 31 major cities in Asia and Oceania. (See the table at the end of this article for the complete list; Download the JETRO survey here)
While Aquino is blaming the power crisis on the people of Mindanao for being pampered by “cheap” power, Mindanao is actually paying much more than most major cities in Asia. Did you know that residential consumers in the Autonomous Region in Muslim Mindanao (ARMM), Cagayan de Oro City, Northern Mindanao, and the Davao and CARAGA regions are paying twice the electricity rates of residents in Seoul and Beijing? Except for CARAGA, all the Mindanao regions I mentioned also have more expensive residential power rates than Hong Kong. These areas in Mindanao, plus Cotabato City, Iligan City, SOCCKSARGEN, and the Zamboanga Peninsula all have higher residential rates than major Asian capitals like Taipei, Kuala Lumpur, Jakarta, New Delhi, Bangkok, and Shanghai, among others. All in all, Mindanao is paying an average of P1.82 per kWh more for electricity than the collective average residential rate of the 31 major cities in Asia and Oceania surveyed by JETRO.
I summarized these findings in the chart below, which culled data on residential rates from the JETRO survey and data on average residential rates of private distribution utilities (PDUs) and average systems rates of electric cooperatives (ECs) from the 18th EPIRA report. The red bars represent Mindanao regions and cities.
Poorest region
Note that Mindanao has an average official poverty incidence of 33.5% of families (the national average is 20.9%). The country’s three poorest regions are in Mindanao – CARAGA (39.8%), ARMM (38.1%), and Zamboanga Peninsula (36.6%). ARMM does not only have the most expensive power rates in Mindanao, it also has (consequently) the highest cost of living (more than P1,287 based on the family living wage released by the NSCB in July 2008) among all regions in the Philippines, while the minimum wage there is just P232 (or just 18% of the cost of living). Amid this condition, the people of Mindanao are being forced to pay for electricity that is way beyond the rates in Asia’s richest cities. Yet Aquino wants Mindanao to shell out more money to supposedly solve its power crisis.
Blame EPIRA
Mindanao has lower rates than Luzon and Visayas not only because it sources its energy supply from cheaper hydropower but also because the region has been relatively and temporarily spared from the privatization and deregulation drive under EPIRA. State-controlled/owned installed capacity in Mindanao is still about 82% of the total (as of 2010 data from the DOE), compared to 18% in Luzon and 36% in Visayas where most power plants have already been privatized and are now controlled by the country’s profit-seeking “power lords”. Furthermore, unlike Luzon and Visayas, Mindanao does not have an EPIRA-created wholesale electricity spot market (WESM), which has only become a venue for price manipulation and speculation by power monopolies, sparking off wild spikes in power rates.
But EPIRA is also to blame for Mindanao’s energy insecurity. While government retained control over most of the installed and dependable capacity in Mindanao, it did not invest in additional capacity to meet the growing power demand of the region. Government abandoned its strategic role to design and implement power development projects consistent with a long-term industrialization plan and instead focused on selling the assets of the National Power Corporation (NAPOCOR) to private investors as mandated under EPIRA.
Reverse privatization
To fully solve the energy insecurity of Mindanao and the rest of the country as well as the problem of expensive electricity, there is no other recourse but for the state to take over. Aquino could no longer use the excuse that doing so will just further bankrupt the government. Despite the EPIRA, NAPOCOR remains trapped in deep debt (read here). So instead of further wasting limited public resources on a flawed energy program – which only made electricity bills more exorbitant and power supply more insecure – government should start reversing the privatization and deregulation of the energy sector. #
The use of lethal military technology from the US violates Philippine sovereignty and puts Filipinos in great danger (Photo from guardian.co.uk)
The Philippine Air Force (PAF) has denied that it used US-satellite guided missiles or smart bombs in an operation against the Abu Sayyaf Group (ASG) in Sulu last month. It was in reaction to an Associated Press (AP) report claiming that US smart bombs were used in the February 2 air raid that allegedly killed an ASG commander and two top Southeast Asian terrorists along with 12 others. AP claimed that its report was confirmed by four senior Philippine security officials.
Earlier, another article in the Asia Times Online said that the Sulu operation used unmanned aerial assault craft or drones provided by the US. (See illustration below) The article claimed that it was the first known use of US drones in the Armed Forces of the Philippines (AFP) counter-terrorism operations. No less than President Benigno Aquino III admitted that US drones are circling over the country but supposedly only for reconnaissance. The AP report also said that US drones were used but only provided thermal imaging of the aftermath of the air attack. But the clandestine nature of drone missions leaves us nothing to rely on but the assurance by the rabidly pro-US Aquino. And his assurance does not answer the basic question – if US drones can fly over the country secretly from locations we do not know, what prevents them from launching attacks on Philippine soil?
Illustration from ph.news.yahoo.com
The official account of the air raid on the ASG lair claims that the military used “smart pilots” and not smart bombs. A PAF commander based in Zamboanga City appealed to skeptics to “please credit our Air Force”. OV-10s, the aircraft used in the attack, are too old to handle guided missiles, he said, while admitting that the pilots were trained by US forces.
Thus, whether drones, guided missiles, or simply smart pilots were the key, what is clear is that the US played a crucial role in the Sulu operation. However, the use of drones and smart bombs, which are not totally unfounded allegations, steps up US military intervention in the Philippines, raising anew serious concerns on national sovereignty and possible escalation of US atrocities against innocent Filipino civilians.
Unmanned aerial vehicles
Many do not buy the official PAF account of the Sulu air strike. One of them is a former PAF pilot, Captain Joenel Pogoy. Pogoy, detained for two years after exposing corruption in the air force, maintains that it is unbelievable that OV-10s were used in carrying out the attack in Sulu. Without possible enemy fire, the minimum altitude of an OV-10 should not be below 500 feet above ground level (AGL), Pogoy explained. But if there is an expected enemy attack, it should fly at least 1,000 AGL. He added that OV-10s should fly higher during night operation because of terrain height variation. Pogoy seriously doubts that OV-10s – even if manned by smart pilots as claimed by PAF – could achieve pinpoint accuracy in a mission conducted at 3 AM in a Sulu jungle. The only logical explanation is that drones were used, Pogoy said.
That the PAF could have employed drones from the US in the Sulu operation, which reportedly killed Umbra Jumdail or “Doc Abu” (an ASG commander), Singaporean Muhamda Ali (a member of Jemaah Islamiyah or JI), and Malaysian Zulkifli bin Hir (a top JI leader and one of Southeast Asia’s most wanted terrorists) is not farfetched. The US has long been using drones or unmanned aerial vehicles (UAVs) in the region, including the Philippines. In fact, a number of US drones has reportedly crashed or shot down in Mindanao including in Zamboanga (2002), Sulu (2006 and 2007), and Maguindanao (2008).
The current US drone program, under the auspices of the Central Intelligence Agency (CIA), started immediately after the 9/11 attacks. Previously used for simple intelligence gathering, the drones were armed and used for assassination of targeted individual terrorist leaders, even including those outside official war zones, thus further inflaming the fundamental question of US intervention and sovereignty issues. It was first used in February 2002 in the former mujaheeden base Zhawar Kili in Afghanistan against a “tall man” that CIA operatives thought was Osama bin Laden. It turned out that the target was an impoverished Afghan scavenging for scrap metal, according to journalists who probed the incident. He was killed with two others that the CIA, despite the later admission that the tall man was not bin Laden, insisted were “legitimate” targets. (Read brief history of US drone program here)
Under the Obama administration, it has been noted that the use of drones in America’s counterterrorism campaign has greatly intensified. President Barack Obama has not only publicly recognized US drone strikes but has even defended them saying that a “pinpoint strike” is “less intrusive” of other countries’ sovereignty than other military ways to target al Qaeda. (Watch video below).
Was the use of US drones to eliminate al Qaeda-linked terrorists basing in Sulu “less intrusive” of Philippine sovereignty? Not for countries like Pakistan, which is demanding that US drones be removed from their country; and Iran, which captured a US drone flying over their airspace calling it an invasion and dangerous act.
Obama, the Nobel Peace Prize winner, deploys a missile-bearing drone about once every four days while former President George Bush, who initiated the discredited US global war on terror, deploys a drone only once every 47 days, according to one estimate. The US today is also said to be spending more than nine times on drones than when the CIA first used attack drones under the war on terror in 2002.
“isn’t perfect, never is”
Worse, the use of remote-controlled aircraft does not only seriously impinge on other countries’ national sovereignty. Their increased use under Obama has also resulted in a significant number of civilians killed. Pakistan is a case in point. According to data culled by non-profit think tank New America Foundation, there were only 42 US drone strikes in Pakistan from 2004 to 2008. When Obama took over in 2009, the number went up to 53, and more than doubled to 118 in 2010. Last year, there were 70 reported US drone strikes in Pakistan, and 11 so far this year (as of March 13, 2012). The New America said that based on their account, some 17% or almost two out of every 10 people killed by US drones were neither leaders nor members of al Qaeda, Taliban, or any terrorist group. From 2004 to 2012, it has monitored 290 reported drone strikes that killed as much as 2,764 people, of which almost 470 were civilians. One example is the case of a 12-year old Pakistani boy who was killed in a drone attack on Oct. 31, 2011 as exposed by UK-based lawyer Clive Stafford Smith, a campaigner against the use of drones. The child victim had volunteered to help Smith by taking photos of people killed by US drones. In Yemen, an Al Jazeera report said that drone attacks have become more frequent than in Pakistan, killing up to 500 people many of whom were civilians.
The same danger is true with so-called smart bombs, which are not as smart as claimed. For instance, during the February 2001 air attacks on Iraq launched by the US and Britain, Pentagon admitted that most of the smart bombs missed their targets. A separate account said that the bombs missed their targets by as much as 100 meters. US defense officials gave the bombs an accuracy of “about a B minus or a C plus”. In the Kosovo War, it turned out that the accuracy of the smart bombs used by British forces was only 40 percent. In another incident, US smart bombs “accidentally” hit the Chinese embassy in Belgrade during the Kosovo War. Former Pentagon spokesman Rear Admiral Craig Quigley described air strikes using smart bombs this way: “It isn’t perfect. It never is…” Unfortunately for the population where these bombs are being dropped, even the slightest miscalculation could prove massively fatal.
Projecting US power
Drones, together with special operations troops, are expected to play an increasingly more prominent role in US global defense strategy. Facing its worst economic crisis since the 1930s Great Depression, the US has been forced to cut back on its defense spending to address its burgeoning debt and budget deficit. Consequently, it has been looking for more cost-effective ways – in the economic as well as political sense - to continually project US military might globally.
In its budget request for fiscal year 2013, the US Defense department is calling for a 30% increase in its fleet of armed drones in the coming years, according to a report by the Wall Street Journal (WSJ). Quoting Defense officials, the WSJ said that from the current 61 drone combat patrols around the clock, with up to four drones in each patrol, Defense Secretary Leon Panetta intends to “operate 65 combat air patrols constantly with the ability to temporarily surge to 85 combat air patrols.” US defense officials are also planning to deploy more special operations teams at a growing number of “lily pads” or forward operating bases (FOBs). The US plans to increase special forces by 10%, from 63,750 this year to 70,000 by 2015. (See illustration below)
Illustration from online.wsj.com
The increased use of secretive combat drones and special forces will be felt in the Philippines and the rest of the Asia Pacific, which the US has given a more prominent role in its current defense strategy that has special attention on China. (Read document here and analysis here) Negotiations are ongoing between Philippine and US defense and foreign affairs officials to expand US military presence here including the deployment of more special forces, holding more and bigger military exercises, and stationing of US Navy ships. Meanwhile, the largest Balikatan war games yet have been scheduled from April 16 to 27, involving 4,500 personnel from the US Pacific Command. And of course, the admission by Aquino that deadly US drones have been regularly flying over Philippine airspace from undisclosed destinations. Aside from the Philippines, Australia has also already committed to host up to 2,500 US Marines in Darwin in Northern Australia as well as possibly allowing the basing of long-range US drones on Cocos Islands, atolls in the Indian Ocean off northwest Australia.
The idea of people in supposedly sovereign countries being killed at a touch of a button by unaccountable and anonymous CIA operatives from some remote area pushes the cold-bloodedness of US intervention to unprecedented heights.
The use of lethal military technology from the US and the increased presence of their troops in the Philippines seriously violate our sovereignty as a country while further inflaming our internal conflict and unnecessarily escalating our tension with China. The Aquino administration, behind the pretext of improving our national security and protecting the country’s territorial integrity, is putting the Filipino people in a great and unimaginable danger. #
The media called it People Power against oil price hikes. And maybe it is, considering how the issue of very high oil prices has united various groups from a wide political spectrum. From militant labor and transport to businessmen, from progressive lawmakers to the more traditional legislators, from Church leaders to the radical youth, from civil society to national democratic organizations. Looking at the lineup of the convenors and supporters behind the Coalition Against Oil Price Increases (CAOPI), one would get a sense of broadness that could resemble those of the movements which toppled two regimes.
Broad coalition
CAOPI was launched last Monday (March 26) in a press conference at the UP campus in Diliman. Convenors and supporters who were present include the progressive bloc in Congress led by partylist representatives Teddy Casiño of Bayan Muna, Ka Paeng Mariano of Anakpawis, and Raymond Palatino of Kabataan; Zambales Rep. Mitos Magsaysay, one of the most vocal critics of the Aquino administration; former legislator and now publisher Jacinto Paras; Marikina City councilor Jojo Banzon; Alliance of Concerned Truck Owners and Operators (ACTOO) President Ricky Papa; a representative of National Economic Protectionism Association (NEPA) President Bayan dela Cruz; UP Professor and VP for Public Affairs Danny Arao; Anti-Trapo Movement President Leon Peralta; Francis Mariazeta III, a barangay chairman in Manila; and think tank IBON Foundation Executive Director Sonny Africa. They were joined by national leaders of organizations under the multisectoral Bagong Alyansang Makabayan (Bayan), including militant labor Kilusang Mayo Uno (KMU), transport group Piston, fisherfolk group Pamalakaya, urban poor group Kadamay, women’s group Gabriela, youth groups Anakbayan and National Union of Students of the Philippines (NUSP).
Other personalities who joined the coalition or expressed support but were not present during the launch are Novaliches Bishop Emeritus Teodoro Bacani, Philippine Chamber of Commerce and Industry’s (PCCI) Donald Dee, National Council for Commuter Protection (NCCP) President Elvira Medina, and Manila City Councilor DJ Bagatsing. CAOPI convenors also include members of the Catholic and Protestant clergy, union presidents of the some of the country’s largest companies, as well as student councils of several universities in Metro Manila. (Download the initial list of CAOPI’s convenors and supporters here)
Inaction, crime against the people, too
CAOPI is not calling for the ouster of the Aquino administration. Its raison d’etre is fairly modest – that is for the President to recognize the worsening problem of high oil prices and concretely do something to address it. In its unity statement, the people and groups behind CAOPI said that they are “alarmed and enraged by the inaction of President Benigno Aquino III amid the spate of oil price increases.” The coalition demands that “government immediately intervene to stop the unreasonable oil price hikes, bring down the prices of petroleum products, and control oil prices.”
Edwin Lacierda, Aquino’s arrogant spokesman, as expected dismissed the newly-formed group, insisting that government is addressing the problem. “Kung ayaw n’yong makinig, ano’ng magagawa namin? Kung ayaw nilang maniwala, ano’ng magagawa namin?”
But the simplicity of its message and the concreteness and more importantly, the legitimacy of its demands – amid escalating fuel prices and popular perception of Noynoying – give CAOPI the vast potential to steadily grow and persist, yes, like People Power. Not even the vaunted high popularity rating of Aquino will endure the groundswell of protests and social unrest if government will continue to ignore the problem and insist on its problematic policies like the Oil Deregulation Law and the 12% value added tax (VAT). Note that surveys also show the deteriorating public perception on Aquino’s inaction on high oil prices (for instance, read here).
The Yellow crowd may argue that it is baseless to invoke People Power against Aquino because unlike Marcos and Erap, he is not corrupt. In fact, he is going after Gloria Arroyo, Renato Corona, and their cohorts in plundering the nation. These people are plunderers and they should be punished (although it remains to be seen if Aquino will go all the way in punishing their corruption even if it means undermining the status quo that serves the political elite like Aquino). But going after Arroyo while tolerating and legitimizing the bigger plunderers like the foreign oil companies and their local partners is also a crime against the people. Insisting on collecting the VAT on oil at the great expense of the people is a crime as grave as, if not worse than, collecting tongpats from government projects.
Just and legitimate
CAOPI’s demands and proposals are just and resonate the sentiments of our people. It said that the Aquino administration’s excuse that it is helpless amid escalating fuel prices is unacceptable as it argued that concrete steps can be immediately taken such as: Imposing a moratorium on more oil price hikes, which it said the President can do due to the extraordinary situation of high oil prices undermining public and national interests; immediately bringing down oil prices by removing, suspending or reducing the regressive VAT on petroleum products; and addressing overpricing by oil companies and regulating local prices by and repealing the oppressive Oil Deregulation Law. It challenged President Aquino to exercise political will and implement these reforms to protect the interest of ordinary consumers and the domestic economy. (Download the CAOPI unity statement here)
The group is not asking the people to swamp Edsa to pressure the President to take decisive, pro-people steps against high oil prices, well not yet. But it is asking the public to participate in a series of actions that will force Aquino to listen and do something, beginning with a coordinated noise barrage on March 30. CAOPI declared that it will continue to pressure Aquino and the entire government until they address the urgent problem of excessive oil prices.
Join CAOPI
No group, including the Aquino clique, has a monopoly over People Power, which in its simplest form is about the people asserting its sovereign power to determine which policies best serve their welfare and interests. In demanding that Aquino reverse its position on the VAT and the Oil Deregulation Law and mobilizing the broadest support possible, CAOPI is indeed exercising People Power.
If you wish to become a member or supporter of CAOPI, you may contact its Secretariat at caopi.secretariat@gmail.com and include your name in its Unity Statement. You may also visit the website of Bayan (www.bayan.org) for updates and more information. #
Roxas’s 180-degree turn on the issue of oil VAT is yet another proof that the supposed change the Aquino administration has been peddling is nothing but an illusion (Photo from plurk.com)
On the heels of the successful nationwide people’s protest against high oil prices last March 15, Malacañang reaffirmed its position not to lift the 12% value-added tax (VAT) on oil. One of the administration officials who immediately articulated the Palace stand was Mar Roxas, secretary of the Department of Transportation and Communications (DOTC). Defending the oil VAT, Roxas said that revenues generated by the controversial tax “are being used to render services to the public”. “It’s easy to say ‘stop collecting taxes’ but this would mean that a particular government service will be affected,” Roxas argued.
Mar column
It’s amazing how fast Roxas changed his mind about the oil VAT. To those who have a short memory, let me refresh your recollection by quoting portions of Roxas’s column Mr. Palengke that the tabloid Abante used to publish. The opinion piece, entitled “$100 kada bariles”, was published by the popular daily in its Jan. 8, 2008 issue. It was Roxas’s reaction to the then escalating prices of oil that for the first time breached the $100-a barrel mark.
(Click on image to download full article)
“Hindi na po normal ang sitwasyon natin ngayon. Alam nating ang langis ay talagang nakakaapekto sa lahat ng aspeto ng pamumuhay: transportasyon, pagkain, kuryente, manufacturing ng mga produkto, at marami pang iba. Kaya sa bawat pagtaas ng presyo ng langis, sumusunod naman ang presyo ng iba pang produkto at serbisyo. Nanganganib talaga ang bulsa ni Juan dela Cruz. Maikli na ang kanyang pisi, lalo pa itong iikli.
Naaalala ko, noong kakatapos lang na ipasa ang Expanded Value-Added Tax Law noong 2005, sumipa ang presyo ng krudo mula $36 kada bariles hanggang $56, at natakot tayo noon na sumipa pa ito sa $75 kada bariles.
Ngayon, $100 na, ang layo na sa dating mga presyo at kailangan na talaga ang parehong mga agaran at pangmatagalang solusyon sa umaalagwang presyo ng langis. Kailangan na ng political will. Walang lugar para sa mga “token-ism,” o mga pakitang tao. Kung talagang ginugusto ng pamahalaan na makatulong sa ating mga kababayan, isang malinaw at kongkretong hakbang na maisasagawa ay ang agarang pagsuspinde sa EVAT sa langis at mga produktong petrolyo.
Agarang ginhawa sa halagang P4 kada litro ng diesel o P60 kada tangke ng LPG ang maidudulot nito. Kung gusto talaga ng pamahalaan na mapaginhawa ang buhay ng ating mga kababayan, sana’y suportahan nila ang ating panukala.
Hanggang ngayon, tila ba hindi pa rin nagbabagong-loob ang administrasyon dito. Nakakalungkot, dahil P20-30 bilyon lamang ang mawawala sa pamahalaan sa anim na buwang suspensiyon ng EVAT sa langis, kumpara sa kalakhang P1 trilyong revenues nito. At sabihin nang sa mga social services daw, tulad ng edukasyon at kalusugan napupunta ang pondong ito, nararamdaman ba ninyo ito?
Ang nakakalungkot pa, malaking halaga ng buwis na dapat makolekta ay nawawala dahil sa katiwalian at iba pang mga leakages. Noong 2006 nga, ayon sa isang pag-aaral ng DOF mismo, may P107 bilyon ang hindi nakolekta dahil sa mga leakage. Ang lalong nakakalungkot, ang kalakhan ng mga leakage ay naroon sa mga buwis na hindi nakokolekta sa mga malalaking tao. Hindi nakolekta ang P81.96 bilyong potensiyal na kita mula sa corporate income tax. Samantala, ang tinatawag na “tax gap rate” sa income tax ng mga negosyante at propesyonal ay nananatiling mataas, sa 40%, kumpara sa tax gap rate ng income tax ng mga manggagawa, na nasa 10% lamang.”
Pera ni Juan dela Cruz ito, hindi ito pera ng gobyerno. Hangga’t hindi natin nakikita na mahusay ang paggastos ng gobyerno sa pera ng taumbayan, mabuting ibalik muna ito sa kanila upang maibsan ang kanilang kahirapan. Ipinasa noon ang EVAT dahil nanganganib na humina ang ekonomiya dahil sa sinasabi nilang “fiscal crisis”. Ngayon naman, nanganganib na bumagsak ang ekonomiya kapag naipit nang naipit ang pagkonsumo ng ating mga kababayan. Ibang sakit ang ating nararanasan ngayon, hindi puwedeng parehong gamot pa rin ang ating inumin.” (All emphases mine)
People deserve break
Roxas used to think that removing the VAT on oil, even if temporarily as he proposed then, will translate to immediate benefits for the poor. In his 2008 column, he said it’s P4 per liter for diesel and P60 per 11-kilogram (kg) tank for liquefied petroleum gas (LPG). Today, the immediate benefits are even bigger – for diesel, it’s almost P6 per liter and for LPG, as much as P110. “Government believes it should keep on collecting EVAT on oil and be the sole arbiter on how these revenues should be reallocated. I say, let’s give our people a break… Give the people instantaneous relief from high prices and meager incomes,” said then Senator Roxas in a separate Dec. 20, 2007 press statement. Noon, the people deserve a break, pero hindi na ngayon?
VAT for debt servicing
Indeed, the points Roxas had raised against the continued collection of VAT amid soaring oil prices remain as valid as ever. His arguments, in fact, could very well answer the Aquino administration’s excuses to justify the VAT on oil today. For instance, while revenues have increased because of the oil VAT, social services continued to be marginalized in terms of government spending. Most of the revenues are being siphoned off by debt servicing. When Roxas was raising the issue of oil VAT in 2008, social services comprised less than 21% of total public expenditures while the total debt burden (interest payments and principal amortization) accounted for more than 34 percent. In 2011, preliminary data show that social services are still marginalized at less than 23% of public expenditures while the debt burden continued to hold the lion’s share with more than 31 percent. As Roxas said, “Pera ni Juan dela Cruz ito, hindi ito pera ng gobyerno”. Why should we allow the Aquino administration to be the sole arbiter on how these resources should be used?
Tax leakage
Roxas’s point on the tax leakage, meanwhile, remains a compelling argument against the VAT on oil. A 2010 study by the National Economic and Development Authority (NEDA) estimated that individual tax leakage could reach at least P35.69 billion a year from 2011 to 2016. From 2001 to 2005, the individual tax leakage was pegged at P35.74 billion a year, according to a 2006 study by the National Tax Research Commission (NTRC). Despite the hype of Daang Matuwid, the fact remains that bureaucratic corruption, inefficiency, and wastage continue to deprive government of potential revenues. Alas, like the Arroyo administration, the Aquino government is over-relying on the regressive and burdensome VAT instead of finding other ways to raise revenues such as addressing the perennial tax leakage.
“Perwisyo”
As mentioned, Roxas is now dismissing the very same arguments he once espoused against the oil VAT. For him, protest actions against the VAT and deregulation – issues he used to consider as legitimate concerns that government must address – are “perwisyo” or nuisance. Of course, only the naïve will be surprised by such turnaround of a traditional politician. Roxas obviously just rode on the very popular anti-VAT sentiment when he was still eyeing the presidency. (He eventually gave way to Aquino and ran for the vice presidency but lost to Makati Mayor Jejomar Binay in the 2010 elections.) But now that he is part of the incumbent administration as a Cabinet official, the oil VAT has suddenly become indispensable.
Thus, from the consumer advocate Mr. Palengke, Roxas has now transformed into the VAT apologist Mr. Perwisyo.
Illusion of change
Finally, let me share another quotable quote:
“Napakahalaga ang VAT… Ito ang sagot sa mga problemang namana natin… Kung aalisin ang VAT, hihina ang kumpyansa ng negosyo, lalong tataas ang interes, lalong bababa ang piso, lalong mamahal ang bilihin… Kapag ibinasura ang VAT… ang mas makikinabang ay ang mga may kaya…”
That’s not President Aquino or one of Malacañang’s mouthpieces speaking, although the tune is very familiar to the one being chorused by administration officials. It was Mrs. Gloria Arroyo in her speech during her State of the Nation Address (SONA) on Jul. 28, 2008. Arroyo was responding to Roxas and many others who were demanding that the oil VAT be removed or reduced and that pump prices, which then were reaching historic highs, be controlled.
Tapos na ang pamumunong manhid sa daing ng taumbayan? Roxas’s 180-degree turn on the issue of oil VAT is yet another proof that the supposed change the Aquino administration has been peddling is nothing but an illusion. #
