TRAIN profiteers face economic sabotage raps

MANILA, Philippines — Leaders of the House of Representatives warned yesterday unscrupulous businessmen who would take advantage of the Tax Reform for Acceleration and Inclusion (TRAIN) Law and impose unnecessary taxes on the prices of petroleum products that they could be prosecuted and dealt with the full force of the law.

House Deputy Speaker and Marikina Rep. Miro Quimbo said while selling gasoline at a higher price even if stock was bought early at a lower price “is not illegal per se,” the company could be held liable for economic sabotage if proven that such was done “with malice and with pure profiteering intent.”

Fuel prices increased on Jan. 1 due to global supply concerns and not because of TRAIN Law.

Quimbo called on the leadership of the Energy Regulatory Commission – a majority of whose officials have been suspended administratively by the Office of the Ombudsman – to “make sure that this kind of front loading is not abused.” The ERC monitors fuel prices as the oil industry has been deregulated.

Deputy Speaker Raneo Abu made the same pitch, saying oil companies should not impose the new excise taxes – as a result of the TRAIN Law or Republic Act 10963 – on old stocks they are selling now. 

“This is an unjust enrichment on their part and they should not take advantage using TRAIN for their windfall profit,” the Batangas congressman said. 

Rep. Ben Evardone of Eastern Samar said “the government should activate its task force composed” of the Department of Energy (DOE), the Department of Justice (DOJ) and Philippine National Police “to strictly monitor oil companies for possible violation of the existing laws.”

“The task force can conduct on the spot audits of oil companies to prevent them from charging excise tax on old stocks,” Evardone, chairman of the House committee on banks and financial intermediaries, stressed. 

For his part, Rep. LRay Villafuerte of Camarines Sur urged the government to establish an “inter-agency committee to monitor price movements by oil companies and petroleum dealers – and prevent them from engaging in profiteering.”

“This proposed inter-agency body must be empowered to audit these private firms to make sure they do not shrewdly use the TRAIN as a ruse to jack up prices,” the administration lawmaker said, noting that the TRAIN Law took effect Monday.

Villafuerte likewise said the “interagency group should run after profiteers because companies could not automatically raise their prices until their old oil stocks have been used up.”

“The excise tax is paid at the point of importation or refinery, thus the traders couldn’t jack up prices last Jan. 1 on their old stocks – to the detriment of Filipino consumers – using the new excise rates as an excuse,” he said.

‘ERC won’t be paralyzed’

Meanwhile, Malacañang again allayed fears yesterday that the suspension of the ERC commissioners would paralyze the power regulator and lead to blackouts.  

Presidential spokesman Harry Roque said the administration is studying ways to prevent the disruption of operations of the ERC, which is mandated to ensure reasonable electricity prices and promote competition in the power industry. 

He said one of the possible options is the appointment of officers in charge that would take over the functions of the four suspended commissioners.

“When news of the suspension broke out, the executive secretary started studying the possible options,” Roque said in an interview over radio station dzMM.

“The declaration of (Chief Presidential) Legal Counsel (Salvador) Panelo regarding OICs is one of the possibilities. What is clear is the ERC cannot be paralyzed because the body plays a very important role,” he added. 

Roque assured the public that President Duterte would do something to avert power sector paralysis. 

Last month, the Office of the Ombudsman suspended the four ERC commissioners for a year over allegedly anomalous power supply contracts with 38 firms.

Commissioners Alfredo Non, Gloria Victoria Yap-Taruc, Josefina Patricia Asirit and Geronimo Sta. Ana were found administratively liable for “conduct prejudicial to the best interest of the service aggravated by simple misconduct and simple neglect of duty.”

Former ERC chairman Jose Salazar was also found liable for the same offense but was only slapped with a fine equivalent to six months worth of his salary.

Duterte dismissed Salazar last October for allegedly trying to influence the ERC’s procurement process to favor a supplier and for issuing orders to renew power purchase deals without the approval of other commissioners.

The ombudsman said the commissioners gave unwarranted benefits to the Manila Electric Co. and other companies by exempting them from coverage of the competitive selection process (CSP) requirement already in effect.

The CSP rule requires power firms to conduct public bidding in sourcing their power supply to ensure reasonable rates for consumers.

The ombudsman has also ordered the filing of graft cases against Salazar and the four commissioners. 

ERC chair Agnes Devanadera has warned that the suspension of the four commissioners could result in a “severe paralysis” that could lead to power outages.

She noted that there are P1.59 billion worth of power service applications awaiting action of the power regulator. 

But Roque said the ombudsman resolution could not be set aside because of fears that it could paralyze the ERC. 

“The President will do something about it. But I would like to clarify that we are not in favor of setting aside the suspension order just because we don’t want to paralyze (the ERC),” the spokesman said. 

Roque said the Office of the Executive Secretary is studying the basis of the suspension to determine whether the President can already dismiss them. 

“The problem of the executive secretary is the officials of the ERC have fixed terms. So this will be studied carefully,” he said.  – Alexis Romero