Cash aid to cushion fuel price impact but how to fund it big question
The Palace on Thursday said it is working to provide cash assistance to millions of Filipino families to ease the impact of skyrocketing fuel prices and voiced its support for an increase in the minimum wage for workers.
In an interview over Dobol B TV, acting presidential spokesman Martin Andanar said the planned cash assistance to households will be similar to the Social Amelioration Program or SAP currently being distributed to poor families.
But Andanar acknowledged that finding a source for the cash aid would be a problem, particularly if the excise tax on fuel products is suspended.
“That’s going to be the dilemma for us because if we cut the excise tax on fuel… funds for social services and the DSWD will be lost,” he said, referring to the Department of Social Welfare and Development.
Andanar said the government’s economic team will make the final decision on the matter.
“I am not part of the economic cluster but logic would lead you to ask, where do you get funds?” he said in Filipino.
Albay 2nd District Rep. Joey Salceda, chairman of the House ways and means committee, earlier said he will ask the economic managers if the SAP could be expanded to cover public utility vehicles.
On Monday, Socioeconomic Planning Secretary Karl Chua said the National Economic and Development Authority (NEDA) has proposed raising the fuel subsidy for PUV drivers to P5 billion from P2.5 billion, to further ease the impact of rising oil prices that have been aggravated by Russia’s invasion of Ukraine.
The first tranche of the cash aid was targeted to be distributed in March while the second tranche was targeted for distribution in April.
The government is also releasing a similar fuel subsidy to farmers and fishermen who need fuel for their agricultural machinery.
In the same interview, Andanar said the Palace supported Labor Secretary Silvestre Bello III’s order to regional wage boards to review the minimum wage in view of rising fuel prices.
Andanar said he agreed that minimum wage earners should earn more as their current salaries are not enough for their daily needs.
Bello said Wednesday the minimum wage in the National Capital Region may no longer be enough for workers and their families.
Meanwhile, the largest distributor of electricity, the Manila Electric Co. (Meralco), said its residential consumers would see slightly higher rates in March as the cost per kilowatt-hour goes up from P9.5842 last month to P9.6467.
This, Meralco said, is equivalent to an increase of about P13 in the total bill of a residential customer consuming 200 kWh.
Bills will go up more sharply in succeeding months, however, as global fuel prices take their toll on power rates.
Also on Thursday, four transport groups dropped their appeal for a P1 provision increase in the minimum fare after a meeting with officials from the Department of Transportation (DOTr), radio dzBB reported.
The report quoted Pasang Masda national president Obet Martin as saying that the decision was reached after Transportation Secretary Arthur Tugade warned them of possible inflation if fares were increased—and said the government would double fuel subsidy funds for drivers and operators, from P2.5 billion to P5 billion.
The subsidy, amounting to P13,000 per beneficiary, is scheduled for release in parts, in March and April.
But Senator Sherwin Gatchalian said the country will have to brace for the worst as oil prices continue to soar due to uncertainties brought about by the Russian invasion of Ukraine.
“Nobody knows, we don’t have a crystal ball that can predict when this crisis will end and as long as there’s uncertainty, prices of oil and gas will go up, that’s certain,” Gatchalian said in an interview at CNN.
“We’ve seen that in the past oil crises. We’ve seen that last year when the global economy opened, and with this uncertainty, we have to brace for the worst. Oil prices might even reach $150 per barrel if this uncertainty persists,” Gatchalian said.
He said some analysts forecast the price of oil to even reach $200 per barrel but more than the price, the Philippines will need to focus on energy security.
“We have to also think of the worst when it comes to supply because in our policy, companies are mandated to store 30 days of inventory. After 30 days there’s no more supply. So I’m actually proposing to increase the minimum oil inventory to 45 days, [giving us an] extra 15 days of buffer. And the government [will have] to subsidize the carrying cost because when these companies buy another 15 days, they have to pay for interest. And that’s where the government comes in in terms of energy security,” Gatchalian said.
He said the latest pronouncement of the US and the UK not purchasing Russian oil will have an impact on supply.
“That will have a tremendous impact because, where will the UK source their oil?” he said, saying it was likely they would buy oil from the same sources the Philippines gets its supply from.
He noted that oil prices have gone up by an average of 20 percent from 30 days ago.
Senator Joel Villanueva, meanwhile, said the skyrocketing gas prices would make commuting to work more expensive for thousands of call center workers, and that the government should “temporary withdraw its ultimatum” to business processing outsourcers (BPOs) to end work-from-home arrangements or lose their tax incentives.
The Fiscal Incentives Review Board has set that deadline for BPO employees to return to office as a condition for information technology and business process management firms in freeports and economic zones to continue enjoying tax perks and fiscal incentives.
“I believe that the rise in gas prices is exacerbated by the conflict in Ukraine, which makes the appeal to extend the deadline a very reasonable one,” Villanueva said.
Villanueva, chairman of the Senate committee on labor, employment, and human resource development, said both workers and BPO firms will bear the brunt of the order.
Forcing BPO workers to commute to work would mean “that money to put food on the table will now be spent at the gas pump,” the senator said.
“If government is scrambling to ‘soften the pain’ of surging oil prices for many sectors like drivers and farmers, then 1.3 million BPO workers should be entitled to the same mitigation,” he said.
But BPO workers, Villanueva pointed out, in spite of plowing P1.5 trillion into the economy yearly, “are not asking for billions of pesos in fuel subsidy.”
“They just want to be allowed to continue working from home. It is a mitigation measure that will not cost the government anything,” he said.
Villanueva disagreed with government claims that a return-to-work for call center employees will provide local micro, small, and medium enterprises with a needed economic jolt.
“The location of their workstation has no bearing on their spending habits or the level of their savings,” he said.
In fact, by working at home, “BPO workers are keeping community enterprises alive.”
Villanueva backed industry calls to set back the deadline to return to onsite work until the lifting of the state of calamity, “to allow for seamless transition, for the sake of our workers.”
He said if industry earnings – and their contribution to the economy – have not been hurt by remote work, “then why revise a working arrangement that yields the same productivity?”
Villanueva earlier renewed his call to fully implement Republic Act No. 11165 or the Work From Home Law, which he sponsored and authored during the 17th Congress. The measure recognizes work from home–or telecommuting–as an alternative work arrangement under the country’s labor laws.