Roxas urges government to address problems of consumers

Sen. Mar Roxas called on government yesterday to immediately address the woes of consumers, particularly families of overseas Filipino workers (OFWs) as a result of the steep price of oil products as well as the recent strength of the peso.

“I reject that the government is helpless. Here is one clear step that if the government wants to do something, it can,” he said, referring to his proposals to suspend the value-added tax (VAT) on oil and to rebalance the country’s debt.

During a consultation yesterday by the Senate committee on trade and commerce, transport groups and other sectors affected present supported the proposal to suspend the 12 percent VAT on petroleum products.

Pinagkaisang Samahan ng mga Tsuper at Operator Nationwide (PISTON) secretary-general George San Mateo said that their group is supporting the call to suspend the VAT on oil, as it would redound to direct benefits to both the transport sector and consumers. He pointed out that the reduction of import duties on crude oil—which is already low at three percent – would not necessarily translate into reduced fuel pump prices and may only benefit oil companies who may opt not to pass-on this discount.

Philippine Exporters Confederation (Philexport) president Sergio Ortiz Luis said exporters, particularly those who are small and medium-scale firms, could not cope with the 20-30 percent appreciation of the peso – and depreciation of their incomes – in a span of a year. He made a call to government for “burden sharing.”

Roxas recently put forward two proposals where the government can “walk the talk” in aiding consumers and sectors that have been propping-up the economy, including OFWs, exporters, business process outsourcing (BPO) and tourism.

One of the proposals is Senate Bill No. 1962 that seeks to treat petroleum products as “zero-rated” goods—thereby effectively suspending the imposition of VAT on the same—for a period of six months. Roxas said that at this point, colleagues have signified support for the bill, which has been referred to the ways and means committee.

Roxas challenged the government to let go of some P40 billion revenues collected annually from imposing the 12 percent VAT on crude oil and finished petroleum products, saying a suspension of the VAT on these products would directly benefit the consuming public by as much as P4 per liter of fuel bought.

“Secretary Teves, as well as the President, is sworn to uphold the law. So if we change the law, they will have to follow,” he said when asked what it takes to change the mind of the government on suspending the VAT on oil.

Roxas explained that P40 billion revenues from VAT on petroleum products is only three percent of the national budget of P1.3 trillion for next year.

Roxas pointed out that due to the depreciation of the peso by almost P10 since last year, incomes of families of OFWs have depreciated by as much as 20 percent, or by P20,000 each if there are eight million OFWs abroad remitting an aggregate $16 billion per year. Furthermore, incomes of the export, BPO and tourism sectors have contracted by the same rate, thereby compromising employment in these growth sectors.

To address this, Roxas earlier proposed that the government cease borrowing in dollars to finance or “roll-over” maturing debt, and instead, borrow in pesos locally to prop-up demand and effectively increase the greenback against the peso.

In yesterday’s consultation with the government and sectors by the Senate committee on trade and commerce, representatives of the OFW, export and transport sectors aired their plea for immediate and concrete government action.

In behalf of OFWs, OFW Association president Pepito Quijano and former Philippine Association of Service Exporters president Lito Soriano said that decreased earnings could lead to the reduction of investments by OFW families in properties and education. They also proposed that remittance fees be reduced and that banks support OFWs through personal finance education, among others.

Meanwhile, Alliance of Concerned Transport Organizations (ACTO) chairman and president Efren Deluna lamented that while the government takes many taxes and charges from them, they have yet to feel the direct benefit of the taxes they pay.

Philippine Association of Supermarkets, Inc. president Federico Ples also noted that reduced OFW spending has also made a dent on their sales.