Palace bats for government audit of oil firms

MANILA, Philippines - Malacañang ordered the Commission on Audit (COA), the Bureau of Customs (BoC), and the Bureau of Internal Revenue (BIR) yesterday to explain why they should not be held in contempt for refusing to obey a court directive for them to examine the books of the “Big Three” oil companies.

Press Secretary Cerge Remonde said court directives are something not to be ignored and taken lightly.

“They (COA, BIR and BoC) should really explain their actions to the judge and to the people because the public knows that prices of fuel are going up,” Remonde told the government-run Radyo ng Bayan.

Judge Silvino Pampilo Jr. of the Manila Regional Trial Court Branch 26 issued a one-page order Friday directing the three agencies to explain why they should not be cited for contempt for defying the court’s order issued last April 27 and May 9. Pampilo gave them a 72-hour deadline for their explanaton.

In the two previous directives, Pampilo ordered COA Chairman Reynaldo Villar, BoC Commissioner Napoleon Morales and BIR Commissioner Sixto Esquivias IV to form a panel of auditors who would open and examine the books of accounts of Petron Corp., Chevron Philippines and Pilipinas Shell.

Pampilo denied last July 8 a motion for reconsideration filed by the Office of the Solicitor General (OSG), representing the three government agencies, and the country’s three largest oil firms to stop the audit.

The case stemmed from a petition filed by the Social Justice Society (SJS), a civil society group, for declaratory relief. The SJS asked whether the three oil firms are committing cartelization and predatory pricing under Section 11 of Republic Act 8479 or the Oil Deregulation Act of 1998, and monopoly and combination in restraint of trade prohibited under Article 186 of the Revised Penal Code.

The SJS contended there is a need to solve the mystery surrounding the frequent increases in the prices of petroleum products.

Not part of mandate

Meanwhile, Morales said the BOC was unable to implement the court’s order to audit the three oil firms because it is not part of its mandate.

He said they are caught in the middle: they will be cited for contempt if they do not implement the court order, but if they conduct the audit, oil firms would question the BOC’s authority to do so.

 He said even if the motion for reconsideration has been denied, this is not final and executory as there are still other legal remedies available.

 “The BoC, BIR and COA have different mandates and we could not just merge them into one. This would only bring about confusion,” he said. “The issue here (in court) is local pricing. What jurisdiction do we have? We can only act within our framework.”

BoC Assistant Commissioner and Post Entry Audit Group chief Rolando Ligon Jr. said while they have a PEAG office, it is concerned with determining if an importer paid proper taxes and duties.

 “Determining if companies are engaged in price manipulation is not part of our mandate. That is beyond our expertise,” he said. – With Sandy Araneta, Evelyn Macairan