BY ARNOLD PADILLA
AT 12 PERCENT, the Philippines charges the highest rate in Southeast Asia for VAT or VAT-like impositions. Cambodia, Indonesia, Laos, Malaysia, Thailand, and Vietnam charge 10 percent, while Singapore charges seven percent.
We also charge a higher rate than some of the most prosperous countries in the Asia Pacific like Australia, Japan, and South Korea that all charge 10 percent, and Taiwan, which charges just five percent.
While it is not the Philippine government that sets the price or the price adjustments in the global oil market, it should nonetheless drop its defeatist attitude and cries of imagined helplessness as Filipinos suffer from rising prices.
The government can directly and immediately reform its tax policy on petroleum products and reduce the cost not just for jeepney drivers and their households but for the entire economy.
REGULATION AND NATIONALIZATION
Beyond abolishing oppressive fuel taxes, the government can and must repeal Republic Act (RA) 8479 or the Oil Deregulation Law to protect the public and the country from excessive prices and unreasonable price increases. In its place, policymakers must develop and implement a comprehensive program for regulating the downstream oil industry.
This program, which Congress can legislate, should contain the following essential components:
1) Centralized procurement of imported crude oil and refined petroleum products;
2) Buffer fund, which can be financed through the operations of the centralized procurement to cushion the impacts of sudden surges in global prices;
3) Transparent determination of pump prices, including through full public disclosure of pricing scheme and inventory of the oil firms;
4) Democratic public consultations or hearings to justify oil price adjustments; and,
5) State participation in refining and distribution of petroleum products.
Seldom discussed is that the issue of high oil prices and allegations of price manipulation is just a consequence of the fundamental problem of the Philippine oil industry, which is foreign monopoly control through their direct investments and strategic partnerships with the local compradors. The country must seriously pursue a long-term nationalization program that would end the domination of transnational companies and their local agents. The initial reforms cited earlier to regulate the downstream activities of the oil companies are a positive step towards nationalization.
Nationalization requires the reorientation and restructuring of the oil industry to uphold the people’s welfare and advance the national interest. For example, with a nationalized oil industry, the people and economy would genuinely benefit from undertakings like the Malampaya instead of foreign capital and local cronies and oligarchs exploiting such projects for their narrow private interests.
It is hard to nationalize the oil industry if the government would not shift from its current neoliberal development paradigm, which permits the unbridled operation of so-called market forces and relies too much on imported commodities and foreign capital. The nationalization of the oil industry can only be successful within a national industrialization program where internal sources of growth are promoted and protected. (Bulatla.com)
