Gov’t scrambles amid oil crisis

Duterte may ask Congress to study a state of economic emergency

President Rodrigo Duterte is considering calling a special session of Congress to discuss a possible state of economic emergency and other recommendations of his Cabinet to mitigate the impact of the Russian invasion of Ukraine on the Philippine economy.

A woman activist stands next to placards with slogans during a march to Malacanang Palace to celebrate International Women’s Day in Manila on March 8, 2022. (Photo by Ted ALJIBE / AFP)

Senators on Tuesday supported calls for a special session to declare such an emergency, although Energy Secretary Alfonso Cusi – a member of Duterte’s economic team — said there is no need to do so yet, despite the ongoing war in Ukraine that has pushed oil prices to unprecedented levels.

“The government is doing everything. We are working together,” Cusi said, while acknowledging that gasoline could reach P100 per liter if the increase in world oil prices does not abate.

On Tuesday at the Palace briefing, acting presidential spokesperson Martin Andanar said a “full-blown war” or “world war” may trigger the declaration of an economic emergency, which would be studied through the Office of the Executive Secretary.

Duterte’s economic team on Monday proposed government interventions to ease the effect of fuel price hikes and the Ukraine-Russia conflict on the country, Andanar added.

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“It will require the full Cabinet and it will require the security cluster, the economic cluster to convene on this. And of course, the President will be the one who would chair this meeting… Well, it’s not yet happening,” he said.

In his public address “Talk to the People,” Duterte said the special session aims to pass intervening measures to cushion the effect of the war in Ukraine, which includes price spikes for fuel and basic commodities.

Duterte admitted that there may not be enough time to tackle all the measures as he has less than three months in his term.

“Let’s be frank with Congress. This is intended really for the welfare of the people. If you have the time, sit with us and we can discuss it. Otherwise, you’re on your own,” Duterte said.

“It is much better to… let us study the situation…. you know, so there’s gonna be an election, and after, there will be euphoria. Then nobody’s really focusing on anything except the changing of the guard …. So that would eat a lot of time,” the President said.

“The recommendations of NEDA [are] really vital… to keep the economy humming for a few months,” he said, referring to the National Economic and Development Authority.

During the Cabinet meeting, Socioeconomic Planning Secretary Karl Chua proposed to the President the lowering of tariff rates for pork and increasing the fuel subsidy and discount vouchers for transport drivers and farmers, and the nationwide shift to the loosest COVID Alert Level 1, to keep prices steady.

“In terms of the tariff reduction, since Congress is not in session, we will submit a request for the issuance of an executive order. Only two laws are needed, [so] we will prepare it immediately so that Congress can consider it immediately when they return in May for a session,” he added.

Congress is adjourned until May 22 to accommodate the election period that started on February 9.

Finance Secretary Carlos Dominguez III also said Monday night that while conflict between Russia and Ukraine does not involve Filipinos directly, the Philippine economy will still “likely be a collateral damage.”

“It is as if we are hit by a ricocheting bullet,” Dominguez said in his report to the President. “These indirect shocks are likely to be felt through four major channels—the commodity market, the financial market, investments, and the impact on our fiscal health.”

Dominguez said oil and food prices are expected to go up as Russia is the largest exporter of natural gas and wheat, while Ukraine is the fourth largest exporter of corn.

Senate President Vicente Sotto III said if the President calls a special session, he will have to convene the chamber.

Senate President Pro Tempore Ralph Recto also backed calls for a special session to address rising prices, especiallyfuel and power, and to assist those who need it.

Senator Panfilo Lacson, who is running for president, said if Duterte calls a special session, they must comply. “Whether or not I will support the declaration of a state of economic emergency will depend on the proposal to be submitted by Malacanang,” he said.

Another presidential candidate, Senator Manny Pacquiao, underscored the urgency of holding a special session to specifically pass measures that would either suspend value-added taxes or excise taxes on fuel products. He said he was willing to take time off from his campaign to attend the session.

Also in the Senate:

• Senate Minority Leader Franklin M. Drilon said he does not see any legal impediment that would prevent the Department of Finance and the Bureau of Internal Revenue from suspending the collection of fuel excise taxes to cushion the impact of astronomical increases in the prices of petroleum products. He said the TRAIN Law should be interpreted liberally in view of the current situation.

• Senator Grace Poe urged the government to move quickly to distribute aid to public utility drivers and farmers, who are suffering from the rising cost of fuel.

• Senator Juan Miguel Zubiri also batted for the suspension of the excise tax on fuel products amid skyrocketing fuel prices. He also called for a stronger implementation of the Biofuels Act, to bolster the use of alternative fuels.

Meanwhile, former Foreign Affairs secretary Albert del Rosario urged the government “to take concrete actions” to contain the spillover effects from the Russian invasion of Ukraine, including the immediate repatriation of 5,000 Filipinos working in Russia and countries neighboring Ukraine.

“The downfall of the Russian ruble is now making the remittances of these OFWs worthless,” Del Rosario said of the Filipinos working in Russia. “Worse, the deteriorating economic condition of Russia, as a result of the West’s sanctions, is putting the lives of these OFWs in harm’s way.”

The former ambassador also suggested that the government should now take even more seriously the development and extraction of energy from Reed Bank and other Philippine energy sources.

“The looming energy crisis in our country has been exacerbated not only because of the depleting reserves of the Malampaya gas field, but also because of the inevitable global energy shortage resulting from the West’s sanctions on Russia,” Del Rosario said.

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