State of national energy emergency declared

MANILA, Philippines, March 25 ------ He’s still not calling the situation a crisis, but President Marcos declared a “state of national energy emergency” as fuel prices continue to soar and as supply nears depletion. Through Executive Order 110, the President also ordered the adoption of a whole-of-government approach to easing the burden of affected sectors under a Unified Package for Livelihoods, Industry, Food and Transport or UPLIFT. It is the first time that a president exercised such authority to respond to oil supply disruptions under Republic Act 7638, which authorizes the President to declare a critically low ener­gy supply and implement energy allocation.

With the suspension of fuel excise taxes already in motion, senators, meanwhile, are eyeing the reduction or suspension of the 12-percent value-added tax (VAT) on petroleum products as further relief for consumers battered by the Middle East crisis. In issuing EO 110, Marcos said the US-Israel war on Iran that forced the closure of the Strait of Hormuz has triggered “uncertainty in global energy markets, severe disruption in supply chains and significant volatility and upward pressure on international oil prices, thereby posing a threat to the country’s energy security.”

As a net importer of oil products, the Philippines is vulnerable to disruptions in global oil production and transportation, according to Marcos. In the EO, the President cited a recommendation from Energy Secretary Sharon Garin that measures like fuel and energy allocation have to be taken, as current circumstances “pose an imminent danger of a critically low energy supply.” The President will chair the UPLIFT, with the secretaries of energy, transportation, social welfare, agriculture, finance, budget and economy, planning and development.

Earlier, Sen. Bam Aquino pressed energy officials on additional interventions to lower pump prices, noting that the Senate had already fast tracked the enrolled bill suspending fuel excise taxes. He pointed out that VAT accounts for a massive chunk of fuel costs. “We’ve already talked about VAT. It is 12 percent of the price of fuel at the gas station. Is that a possibility – to also suspend VAT? Because if it’s 12 percent of P120, then it would be considerable. That’s what, P14 to P15 right away,” Aquino said in Filipino and English.

Energy Undersecretary Felix Fuentebella confirmed that discussions are underway, although they are leaning toward adjusting the tax rate rather than outright suspension due to supply chain complexities. “It’s more of having a different rating, it’s not suspending because there’s a supply chain we have to note when we’re talking about VAT. Probably a zero rating or a lower rating for consideration of our economic managers,” Fuentebella explained.

Aquino assured the Department of Energy that the upper chamber is willing to work overtime to pass the necessary tax reforms if economic managers give them the green light. “Let me tell you for the record that the Senate is ready to pass such reform if necessary. We will, I think... go back and have a special session if needed, if we need to do reforms on the VAT,” Aquino declared, warning that even if the Middle East conflict ends tomorrow, it will take three to six months for global pump prices to normalize. Meanwhile, the House of Representatives transmitted to the Senate House Bill (HB) 8418 authorizing the President to suspend or reduce fuel excise taxes, after it was signed by Speaker Faustino Dy III. He and Majority Leader Sandro Marcos were the principal authors of the measure.

Source: philstar.com