Energy law threatens education fund

ORMOC CITY, Philippines — Educators, student organizations, parent-teachers associations and other stakeholders of the DepEd-Ormoc City Division gathered yesterday to discuss possible action against the passage of Republic Act 9513 or the Renewable Energy Act of 2008.

The bone of contention was that RA 9513, when implemented, will technically scrap the Special Education Fund (SEF) in violation of section 235 of Republic Act 7160 or the Local Government Code.

RA 7160 empowers a local government unit to impose a special levy on real property from commercial and industrial establishments, one percent of which will be for the SEF.

The city government has been collecting from business and industrial establishments two percent of real property tax, one percent of which is for basic tax and the other one percent goes to the SEF to be used by the city schools division.

RA 9513 however, although still waiting for implementing rules to take effect, is bound to remove the SEF, according to education officials as confirmed by executive director Ma. Presentacion Montessa of the Bureau of Local Government Fund.

DepEd-Ormoc was referring to RA 9513's section 15c (Special Realty Tax Rates on Equipment and Machinery), which provides that power generator or developer using renewable energy should only be subjected to a maximum rate of 1.5 percent.

Montessa, in her response to a query from officials of the Energy Development Corporation, ruled that the firm being registered with the Department of Energy as a renewable energy operator or developer may avail itself of the 1.5 percent special tax rate under RA 9513.

Attached in Montessa's letter to EDC, a copy of which was furnished to The Freeman, was a transcript of the minutes of the bicameral committee conference that drafted the law wherein a congressman was quoted as declaring: "Ang mawawala diyan ay ang SEF."

Sol Lumarda, City Schools Division superintendent who also has a copy of the transcript, was alarmed of the threatening situation saying that, without the SEF, the division will find it hard to solve the perennial problems of lack of teachers, classrooms and other annual programs of DepEd, including sports development.

"SEF has been the source of funding for our job order teachers, our new classroom buildings, our training and sending of athletes to national games and the Palarong Pambansa," said Lumarda.

There would be collections for the SEF from other establishments in the city but then the money from EDC has been substantially large. According to the Treasurer's Department of the City Hall, the accumulated collection from EDC over the past years amounted to P150 million, and as of May this year, the firm has already paid over P46 million.

Without EDC's payment, the city has collected until May for this year only a total of P5 million, and this meant that should the EDC avail of the special tax rate under RA 9513, the DepEd-Ormoc is bound to lose a substantial amount of fund to cover the salary of teachers, books, infrastructures, seminars and trainings.

As of date, the city is yet to collect from EDC a total of P290 million, but with RA 9513, the EDC has demanded instead a refund of P45 million allegedly representing overpayment. 

DepEd-Ormoc is now planning to send a manifesto or protest, depending on the recommendation of the committee formed to tackle the issue, to President Noynoy Aquino, the Senate oversight committee, and education secretary Luistro, demanding for the suspension of the implementation of RA 9513.

It might also request to have those existing energy developers before the passage of RA 9513, such as the Leyte Geothermal Production Field hosted in part by the city, to be exempted from coverage of the special tax rate. 

Further reports stated that Mayor Eric Codilla and the City Council would soon be making moves to question the implementation of the law and protect the education fund from getting mutilated. - THE FREEMAN