‘Deadly combination’

Power rates, wage hikes feared

A leftist lawmaker on Thursday warned of the “deadly combination” of an impending power rate hike and various price increases triggered by the government’s new tax program, even as the country’s largest labor federation pushed for a P157 across-the-board wage hike to help workers cope with rising inflation.

“Definitely, it is a deadly combination to common Filipinos if the Energy Regulatory Commission approves it,” said Bayan Muna Rep. Carlos Zarate, referring to a P1.55 per kilowatt-hour rate hike sought by the Manila Electric Co. and the price increases as a result of the Tax Reform for Acceleration and Inclusion Act.

In response, the Associated Labor Unions-Trade Union Congress of the Philippines said it would push for a P157 across-the-board wage increase to enable workers to cope with inflation that continues to reduce their purchasing power.

ALU-TUCP National Executive Vice President Gerard Seno urged all 17 regional wage boards nationwide to meet and convene voluntarily and declare the existence of supervening conditions that warrant a granting of across-the-board wage increases nationwide.

Senate President Pro Tempore Ralph Recto, meanwhile, said there is no need for implementing rules and regulations to suspend the excise tax on gas when the world oil price reaches $80 a barrel, based on Dubai crude, contrary to what the Finance Department says.

Recto said the language of the law is clear, “so it must be self-executory and automatically implemented.”

MUSCLED MEN. Workers manually bend the skeletal steel frames of one of the major posts for the Skyway Project 3 at the Quirino Highway in Manila’s Pandacan district. Lino Santos
In the Palace, Presidential Spokesman Harry Roque said the Philippines will turn to Russia and the United States to buy oil products as the cost of fuel from the Middle East rises.

In a press briefing, Roque said the government is now studying the possibility of importing oil from Russia and US and other non-Organization of the Petroleum Exporting Countries members.

Zarate, a member of the leftist Makabayan bloc in the House, earlier filed a resolution seeking a congressional investigation into seven “questionable” power supply agreements or PSAs between Meralco and its suppliers.

Meralco and ERC officials have attended the inquiries.

Zarate said Meralco’s PSAs were actually with its own sister companies, subsidiaries, and affiliates in “sweetheart deals” that cost Meralco customers P5.22 per kWh.

“This is P1.55 per kWh more than what Meralco wanted us to believe in the PSA applications and in its earlier House presentation,” Zarate said.

The seven PSA applications were earlier submitted to a joint House panel that looked into the contentious contracts. Based on these applications, the cost of electricity generation would supposedly only average P3.67 per kWh.

Zarate added the P1.55 per kWh additional hike will cost millions of Meralco customers P54.54 billion in additional charges annually.

Zarate earlier denounced the skyrocketing prices of basic products resulting from the implementation of TRAIN this year.

Based on Philippine Statistics Authority numbers, food prices alone rose 5.7 percent in March, from 4.8 percent in February and 3.1 percent in March last year.

“There is a need to repeal or at the minimum amend the regressive and anti-people provisions of TRAIN,” Zarate said.

HOLD YOUR BREATH. With Meralco scheduled to increase the power rates by 31 centavos per kilowatt hour next August, the company’s linemen go double quick to repair electric pylons along United Nations Avenue in Manila (top left), while a gasoline attendant fills a motorist’s  tank with fuel (above) nearby with oil prices soaring like kites in the summer sky. Norman Cruz
Under the Wage Rationalization Law, wage boards are mandated to adjust pay rates due to supervening conditions affecting the capacity of workers to cope with inflation.

Due to fast-rising inflation, the purchasing power of the P512 minimum pay in Metro Manila which is highest minimum wage in the country, for example, has eroded by P186 per day, Seno said.

In a monitoring on the impact of inflation to the daily wage made by the Bangko Sentral ng Pilipinas and the National Wages and Productivity Commission, as of March 2018, the real value of P512 minimum wage is now only P326 a day.

This amount is way below the amount a family needs to survive in a day.

The ALU-TUCP estimates that a Filipino family of five needs at least P1,200 a day to cope with rising cost of living and to live above poverty level.

While the conditions of workers and their families’ lives are getting worse due to rising costs of living and eroding value of their wages, the government must also contribute to the welfare of the labor force, Seno said.

Recto said RA 10963 explicitly provides for this “price triggered collection moratorium” which was reiterated in BIR Revenue Regulations No. 2-2018, the law’s IRR on petroleum products pursuant to RA 10963.

However, “a separate Revenue Regulation shall be issued for this purpose,” the IRR states.

“The tripwire is $80 per barrel, based on Dubai crude as reflected in MOPS. This is the circuit breaker in TRAIN. When oil touches this price, the excise tax on gas is suspended,” he said.

Recto said the weakening of the peso versus the US dollar was also having an impact on the cost of fuel.

Senator Grace Poe said she wants to provide another layer of social protection measures to safeguard the poor from the recent spikes in prices of widely used goods and services that may have been brought about by the first tranche of the administration’s tax reform package.

Poe’s panel will head to Iloilo City today to conduct a hearing on the “domino effect” of the TRAIN Law particularly on fuel, electricity, water and transportation.

On May 22, oil firms implemented a big-time increase on pump prices, prompting transport groups to call for higher fares. According to Poe, her office received reports that pump prices in the provinces reach a staggering P70 per liter.

Poe, as head of the Senate public services panel, voiced her concern that the tax reform law purportedly offset workers’ higher take-home pay amid the unrelenting hikes in consumer prices.

Under the TRAIN Law, poorest families are entitled to get P2,400 each in cash grant this year, and will increase to P3,600 per beneficiary in 2019 and 2020.

Consumer prices rose 4.5 percent in April compared to a year ago, setting its fastest pace in over five years.

In Malacañang, Roque said the Philippine government will follow the example of China, which now imports oil from the United States at a lower cost.

The Philippines imports nearly 90 percent of oil from Opec members for domestic consumption.

Topics: deadly combination , leftist lawmaker , Rep. Carlos Zarate , Tax Reform for Acceleration and Inclusion Act

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