Malacañang urged to certify the proposed measures as priority bills
The global financial crisis is already on a downturn, but not after leaving the local economy weak, with the country’s gross domestic product or GDP registering almost nil year-on-year growth at 0.4 percent, while per capita GDP declined by 1.5 percent.
A frail and volatile economy coupled with the high prices of goods and services remain as major threats to economic recovery, with exorbitant electricity prices in the country – one of the highest in Asia, being cited as one of the major roadblocks.
Addressing the heightened clamor for lower electricity rates, legislators have recently been proactively crafting measures to ease the burden of high power costs in the country.
Of all the proposed measures, Senate Bills 3147 and 3148 of Senate President Juan Ponce Enrile are the most prominent. Supporters of the twin power measures are urging Malacañang to certify these as priority bills to ensure speedy deliberation, passage and enactment into law.
Enrile’s bills and its counterparts in the Lower House, House Bills 6208 and 6207, bravely ask for a change in government’s treatment of public service, including services provided by public utilities, as major source of revenue. In the case of the power sector, the bills seek to reduce the layers of taxes imposed on this industry to lower electricity prices.
Once passed, the twin bills stand to grant the much-sought economic relief of electricity consumers, especially the power intensive industries. According to Enrile, businesses and industries will have their power costs reduced from a low of P1.34 to a high of P2, while electric bills of residential consumers will go down by P1 at the very least.
Business groups openly support SB 3148, in particular, which aims to reduce the royalties collected by government from indigenous energy sources from 60% to 3% of net proceeds from the sale of such energy sources to lower electricity rates.
In a statement, Philippine Chamber of Commerce and Industry (PCCI) President Edgardo G. Lacson said that they support the redirection of government share of royalty for the reduction in electricity rates to end-users as stipulated in SB 3148. If passed, PCCI also hopes to see an adequate percentage of the fund from the royalties supporting energy efficiency initiatives to enhance the competitiveness of business enterprises.
Accounting for about two-thirds of total Philippine exports, the Semiconductors and Electronics Industry in the Philippines (SEIPI) has also been asking government to reduce the royalties in indigenous energy sources, like the natural gas of Malampaya, so that foreign investors will not transfer to other ASEAN countries which have more competitive power rates.
SEIPI President Ernie Santiago urged Malacanang to certify Enrile’s twin power bills as priority bills to ensure immediate passage.
“We hope that Malacanang and Congress will certify these proposed measures as priority bills so that the power rates in the country will be lowered, thus making our industries more competitive against neighboring Asian countries,” Santiago said.
The Foreign Chambers of Commerce through its chairman, Petteri Makitalo, likewise supports measures that will bring down electricity rates in the country. Makitalo says, “Aside from bringing down taxes which only get passed on to consumers, government should also remove barriers to entry for those who wish to harness alternative sources of energy.”
At the consumer front, groups such as National Association of Electricity Consumers for Reform (Nasecore) and Gabriela Women’s Party have been calling for the removal of the excessive taxes on electricity to ease the burden of residential consumers.
About half of Filipino families have reduced electric consumption in the face of double-digit inflation rates for basic necessities, according to Pulse Asia July 2008 Nationwide Survey on Coping with Double-Digit Inflation Rates.
“Malacañang can very well reduce our electric bills significantly and give much needed respite by removing taxes imposed on the power industry. Removing the VAT on electricity is by itself a form of direct subsidy to consumers,” said Gabriela Representative Liza Maza in a prior statement.
For his part, Nasecore President Pete Ilagan said, “Electricity costs would be lower if Enrile’s power reform bills are passed. The lower costs will be reflected in our monthly bills.”
Currently, government is charging power utility firms with a 12% value added tax (VAT) on top of a 32% corporate income tax, and a local franchise tax imposed on their gross receipts which they simply pass on as additional charges to consumers.
Under SB 3147, government will instead charge a uniform 3% franchise tax on the distribution income of distribution utilities in lieu of all national and local taxes.
Enrile said that both power reform bills will serve as an economic stimulus which will not only make industries more competitive, but will also contribute to more purchasing power to the consuming public.
The call for lower electricity cost has even spread into cyberspace. In a comment in the blogsite, www.murangkuryenteparasapilipino.wordpress.com, poster Jimmy Peña said, “Good news ito sa lahat ng mga Pilipino dahil malaking tulong ‘to lalo na sa ordinayong tao! Pag naisabatas ito, siguradong giginhawa tayong lahat. (This is good news to all Filipinos because it will be a big help especially to ordinary citizens. If the bills will have been passed, everybody will surely benefit from it.)
