THE chairman of the Senate Committee on Economic Affairs aired serious concerns that potential investors in the vital energy sector were turned off by the reported removal of key incentives in the second round of the Duterte administration’s Tax Reform for Acceleration and Inclusion package or TRAIN 2, dubbed “Trabaho” bill in the House of Representatives.
Sen. Sherwin T. Gatchalian warned against the backlash over the weekend, suggesting that the existing incentives be retained, if the government is serious in tapping the country’s resources.
“Dahil ang gusto natin meron tayong sariling enerhiya, sariling langis, sariling kuryente, importante na ang private investors ay tuloy-tuloy ang exploration at pagnenegosyo sa atin, [Because we want to have our own sources of oil, power and energy, private investors should be able to continue their exploration activities and do business in the country],”Gatchalian said.
“Pero lumalabas na itong TRAIN 2 ay nagiging issue sa kanila dahil ang mga incentives na ginagamit nila para magnegosyo at kumuha ng mas maraming langis at enerhiya ay mawawala na, [It turns out that this TRAIN 2 is a thorn in their side because the incentives they need may be removed],” he added.
This prompted the Committee on Economic Affairs to strongly recommend to the Duterte administration the retention of existing incentives in TRAIN 2 in order to attract more investors in the oil and gas sector.
Gatchalian said TRAIN 2 included renewable energy and oil and gas exploration “that we badly need because almost 70 percent of coal is imported and 90 percent of oil is also imported.”
He said it was also noted at the hearing that when the price of oil and coal increase, public transport fares and electric bills also go up.
“So isa sa rekomendasyon ay i-retain ’yung mga incentives, oil and gas ang pumasok sa atin, kasama na renewable energy at oil and gas exploration na kailangang-kailangan natin dahil almost 70 percent ng coal ay imported at 90 percent ng langis ang imported,” he said. “Lumalabas din sa hearing na pag tumaas ang presyo ng langis at coal tataas din presyo ng kuryente at pamasahe, [One of the recommendations is to retain the incentives so the Philippine oil and gas sector can attract more investments, which we badly need because we import 70 percent of our coal requirements and 90 percent of our oil requirements. During the hearing, it was revealed that if the price of oil and coal increases, power rates and fares also go up].”
The senator affirmed the consensus at the Senate hearing, shared by industry players, to retain the status quo on incentives granted by the government to the oil, gas and renewable-energy sector.
“Ang gusto ng industry proponents status quo, ’wag nang galawin. Dahil maganda na ang batas, ’wag nang galawin. Ang aking proposal ay ’wag nang tanggalin ang incentives na binibigay sa oil and gas at sa renewable energy dahil ’yan ay importante para sa energy security [Industry proponents want to maintain the status quo. My proposal is to retain the incentives given to the oil, gas and renewable-energy sector because these are vital to ensuring the country’s energy security],” he said.
Gatchalian admits even industry players found it difficult to predict what would happen if the incentives are taken out.
“Actually, hindi nasabi ng Meralco, but definitely makikita natin na this year alone tumaas ng 25 percent ang crude oil based on international prices at domestically tumaas din ng almost 30 percent ang presyo ng gasolina at diesel, so may direct impact talaga ang presyo ng crude oil sa international market sa domestic prices, [Actually, Meralco did not mention this, but definitely international crude oil prices alone went up by 25 percent this year. The price of local gasoline and diesel went up by almost 30 percent. The international price of crude oil really has a direct impact on local pump prices],” he said.
Gatchalian added, in a mix of English and Filipino: “If we will retain the incentives then the private investors can proceed with oil exploration. They will set up more renewable-energy sources that will help bring down the importation levels. What we want is not to just keep importing, because we are being hurt by prices in the international market.”