CEBU, Philippines – In an effort to arrest the expensive cost of petroleum in the country, minority Representative Teofisto Guingona, III filed House Bill No. 6375, to establish Strategic Petroleum Reserve.
Guingona patterned the strategy after developed countries like the United States and Japan.
“We can no longer leave our petroleum supply to chance. The LPG [liquefied petroleum gas] shortage we experienced a few months back only shows that the market cannot cope with the public demand at all times, without government support. The government has to be prepared to act as the ‘supplier of last resort’, whenever the market fails,” the Congressman from Bukidnon said.
Under the bill, Guingona leaves the task of managing and administering the Petroleum Reserve to the Department of Energy (DOE) and its corporate arm, the Philippine National Oil Corporation (PNOC).
“It has always been the mandate of PNOC to ensure petroleum and oil supply. What I am proposing is merely an additional strategy to help the agency to do its job. Such strategy is designed to protect our supply security for decades to come,” said Guingona in a statement.
He explained that the Philippines is presently the most expensive producer of electricity in the region, charging more than Malaysia, Indonesia, Thailand, Singapore, China and even Japan.
“This is an undue burden upon our industries and blunting our competitive edge, especially with our high-tech export-based industries. The high price of electricity has been an impediment to better productivity and economic growth for many years,” he added.
According to Guingona all industries are dependent upon this basic resource and factor it into their cost of production. This dictates how much an industry will produce and how much it will charge for its goods and services.
A high cost of electricity and transportation means less risk-taking and fewer opportunities to generate income and create jobs for the people, he said.
Guingona stressed that lowering the price of electricity generation and fuel production can be achieved by foregoing the government’s royalty collections from natural gas exploration and extraction companies.
This move will enable industries to lessen their production costs and allow them to increase productivity. This will also enable them to pass on their savings to their consumers.
“This Act is not an attempt to deprive the government of tax revenues, but a strategic means to increase overall productivity and net tax revenues in the end line. Such a strategy is an effective stimulant for our economy because it encourages greater investment, job-creation and consumption. The overall aim and effect will be a more vibrant economy and an improved quality of life for all,” he concluded. —Ehda M. Dagooc