Wrestling with fuel prices
Diokno fears, without plainly admitting it, that an already cash-strapped and heavily indebted government losing the fuel taxes just might push the country off the economic cliff.
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Diokno fears, without plainly admitting it, that an already cash-strapped and heavily indebted government losing the fuel taxes just might push the country off the economic cliff.
Politically popular is any move that would arrest today's accelerating fuel prices, now on its 11th week of rising and causing everybody anxiety.
Scrapping or reducing taxes on fuel products is obviously populist. Who isn't preoccupied with pump prices in our car-mad and inflation-wary social milieu?
Still, if nothing dramatic happens about the high pump prices — plausible since dire economic consequences must be seriously taken into account, too — there's no denying populist wannabes reap political benefits when trumpeting action against rising fuel prices.
Since politics is all perception, to be seen as doing something about present anxieties bedeviling ordinary helpless citizens is persuasive enough, even if it turns out later that nothing did much change. The temptation is just too great not to take advantage.
Last Monday, House Speaker Martin Romualdez precisely succumbed to that temptation when he convivially met with Filipino oil industry executives.
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Before anything else, Romualdez isn't exactly a household name yet, despite being the House Speaker. He still has to do many things to fire up the public imagination.
As one anonymous influential political and economic blogger frankly put it: "The Speaker must bolster his mass appeal — Martin Romualdez is still not a national name. Voters want a leader who can fix things. Martin could take on that role: Mr. Action Agad."
So, in an obvious maneuver to increase his political stock, Romualdez announced that, at his behest, Filipino oil executives consented to a closed-door consultative meeting about oil companies policing themselves regarding pump prices.
Romualdez earlier pronounced publicly that he hoped the oil executives could be persuaded to do their public duty.
On that score, one political cynic said Romualdez's appeal sounded no more than a veiled threat for the oil firms to moderate their greed.
But after the meet, the smooth-talking oilmen obviously turned the tables on Romualdez, proposing instead that the government suspend or reduce the excise tax and the value-added tax or VAT on fuel products, which account for a large portion of the retail prices at the pump.
ACT-CIS Party-list Rep. Erwin Tulfo subsequently told reporters that the House leadership, obviously meaning the Speaker, seemed inclined to suspend for the time being the fuel excise tax. Thereafter, all hell broke loose.
The pronouncement sent the Marcos government's economic managers puking, particularly fuming Finance boss Benjamin Diokno who thundered, "The revenue loss and its fiscal implications will be awesome."
Hot under the collar, Diokno rebuffed the move with a litany of lethal economic consequences, saying the move could "adversely affect our economic and fiscal recovery, our international credit rating, and our overall debt management strategy, while benefiting primarily the rich and without providing lasting inflation relief."
Without going into the details of all those gory economic consequences, suffice it to know for now that the Finance department estimates the government would lose in the fourth quarter some P73 billion — excise taxes of P41.4 billion and VAT of P31.2 billion — if the fuel taxes are suspended.
In short, Diokno fears, without plainly admitting it, that an already cash-strapped and heavily indebted government losing the fuel taxes might push the country off the economic cliff.
Falling off the economic cliff, by the way, isn't in the best interest of the House Speaker. A cratered economy, if we correctly read his ambitions for higher political office, won't do him any good, only a strong economy will.
Nonetheless, a still fuming Diokno hinted at how the Speaker could save himself from embarrassment.
Removing the fuel taxes will need a law, and "legislation takes time," said Diokno, which means that Congress itself offers the best way out for the Speaker.
Which is probably why moderating voices in Congress were proposing last week time-consuming legislative and executive compromises, notably Albay 2nd District Rep. Joey Salceda, who claims he isn't keen on suspending the excise fuel tax at any time, only an acceptable tax reduction will do.
As such, provided the legislative grind isn't short-circuited by executive fiat, brace yourself for weekly jumps in pump prices during the holidays.
