THE House Committee on Ways and Means on Tuesday endorsed for plenary approval the proposal to use the P16.7-billion tax windfall in subsidizing electricity, fuel and liquefied petroleum gas (LPG) consumption to ease the severe economic burden of Filipinos in the wake of the relentless increase in the prices of basic commodities and services.

The proposal is contained in Joint Resolution 18, “mandating the redistribution of the incremental revenues from the value-added tax [VAT] on petroleum and other fuel products as subsidy to the power and fuel consumption of consumers.”

Speaker Prospero Nograles, who earlier made the proposal, expressed confidence it would breeze through plenary approval. He said he believes that the Senate would “be one with us” for the sake of the people now squeezing their pockets just to make ends meets.

Based on an earlier report of the Congressional Planning and Budget Department (CPBD) of the House of Representatives, the Department of Finance (DOF) is realizing a “windfall” from the VAT on petroleum estimated at P16.7 billion.

Nograles said that while the budget of expenditures and sources of financing high-end assumption for Dubai oil for 2008 was pegged at $70 per barrel, with projected VAT collection of P44 billion, recent Dubai oil price have climbed to (more than) $115.2 per barrel, which is expected to rake in (more than) P60.7-billion collections for the government in 2008.

Under the proposal, P6.7 billion should be redistributed to households whose electricity consumption is 500 kilowatt-hours (kWh) and below.  This means that the government will be subsidizing 3.9 million households or approximately 96 percent of the residential households in the entire franchise area of the Manila Electric Co. (Meralco) alone.

The remaining P10.2 billion should be used to provide subsidy in fuel consumption in the transport industry—P8.3 billion of which for diesel-fuel subsidy for public-transport utilities at approximately P1.30 per liter; and P1.9 billion to be redistributed to subsidize the LPG consumption of households at P1 per liter.

Meanwhile, Director Teresa Habitan of the DOF said the agency has no objection to the proposal, except that it has reservations on subsidizing nonlifeline power users.

At present, lifeline users or those who consume 100 kWh and below are enjoying discounts and are subsidized by nonlifeline users.

She urged the committee to reconsider the 500-kWh cap and simply keep the lifeline rate of 100 kWh, if it “wants to be able to service those who really need the subsidy.”

“Those who consume 500 kWh will be able to afford paying and in fact, if they find it difficult to pay then they can reduce the number of kWh they consume,” Habitan said.

“If the real intention is to help those who are really needy, perhaps middle- class householders like us may just be encouraged to use more energy-efficient technologies or to turn off some of their light or reduce the number of electronic equipment that they have in the house so that this resolution of the House may be able to help those who really need the most,” she added.

Lakas Rep. Exequiel Javier of Antique, committee chairman, said the panel will consider the finance department’s stand during plenary deliberations of the measure.

“Definitely those who are consuming below 100 kWh a month should be entitled to subsidy. Anyway, they are already entitled to discount. But for those who are consuming above 100 kWh, we have to put a line,” Javier said.

Party-list Rep. Teodoro Casiño of Bayan Muna said while he was not against the proposal, Congress must ensure that the system to be used in the redistribution of the tax windfall would be acceptable and that it would not appear as a dole-out.

Because of this, Javier proposed two options on how the subsidy will be given away. One option is for the government to distribute the money to households through the Department of Social Welfare and Development and the other is for the government to directly pay electric companies the subsidy for its consumers and, in the case of fuel, it can be in a form of subsidy paid to oil companies.

THE House Committee on Ways and Means on Tuesday endorsed for plenary approval the proposal to use the P16.7-billion tax windfall in subsidizing electricity, fuel and liquefied petroleum gas (LPG) consumption to ease the severe economic burden of Filipinos in the wake of the relentless increase in the prices of basic commodities and services.

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