Business group warns gov't against audit of oil companies

Local industries have warned that a government audit of oil firms could send the wrong signal to potential investors that the state is intervening in deregulated industries.

Jesus L. Arranza, president of the Federation of Philippine Industries (FPI), has urged the Commission on Audit (COA) to reconsider its plan to check the books of the oil companies.

“The oil industry is already deregulated so having the oil players audited by the COA could be construed as a state intervention,” he said.

Instead, Arranza said if the government must look into the financial books of the oil firms, it can hire an independent auditing firm

“The same result can be achieved by asking independent auditors to conduct the audit, with the Departments of Energy, Justice and other concerned government agencies sitting as observers,” Arranza said.

He explained that looking into the books of oil firms may be justified because this would safeguard the welfare of Filipino consumers against possible abuses. However, Arranza said the COA is not the appropriate party to conduct the audit.

He said this is because there is a danger that this would be made as a precedent for the state to encroach on more privately-held businesses, and consequently discourage businessmen, especially the foreign investors, to invest the needed capital to make the various Philippine industries and sectors more vibrant.

Las August, President Arroyo ordered the Department of Energy (DOE) and COA to conduct an “intensive audit” on oil and power.

Under the Downstream Oil Industry Deregulation of 1998, both the executive and legislative department have the power to direct the DOE to investigate and report the facts relating to any alleged violation of RA 8479 by any person or corporation.

The government said the DOE can use its powers under the law to thwart possible pricing abuses by the oil companies.