‘The Romualdez solution’

The suggestion of House Speaker Martin Romualdez for the government to suspend collection of excise taxes on fuel for the next three months is certainly going to be popular among car owners and commuters all over the Philippines, not to mention the business community. The question is, will he get his way, or will he have to butt heads with the DOF secretary?

The fact of the matter is that the suggestion has long been made many times over, not just by congressmen but also by media, business owners and transport organizations. The problem is that government is too addicted to the revenues they collect, not to mention that the DOF past and present always had the ear of the President in office.

In the case of Cong. Martin Romualdez, there is no arguing the fact that he is only second to First Lady Liza Araneta Marcos in proximity to the President’s ear. But Romualdez also has the added advantage of being the leader of the House of Representatives as well as head of the dominant political party. Unfortunately, all that is not a guarantee of having his way.

The country and the Marcos Jr. administration is heavily in debt and has committed 60 percent of its budget/revenues to debt servicing, as well as a huge operating cost of government. Last I heard, the government spends more than it earns daily. The Romualdez solution would result in a P10 per liter reduction for fuel and P4 per liter for the bio-ethanol mix. The tradeoff is that the suspension of excise tax “would result to revenue losses amounting to P4.9 billion per month or around P14 billion in the next three months.”

Based on history, the DOF will most likely recommend “ayuda” to the most affected but at this point, the impact of fuel hikes and excise tax is no longer a matter of economic status. The fact that members of Congress are all for the idea of suspending the excise tax indicates that their constituents are all complaining and hurting.

The practice of giving “ayuda” or financial assistance to transport operators turned the government into an institutional Robin Hood after the mythical hero who robbed the rich and gave to the poor. “Ayuda” is simply a “device” or a trick that keeps fares at politically safe levels. It is the “pacifier” that government gives to jeepney drivers and operators to keep their mouth shut and commuters even more silent.

Out on the road and with fuel prices so high, coupled with tolls, parking fees, etc., drivers have started to manifest the impact in their daily lives in their driving. If you are a regular driver/commuter on the expressways, it is now noticeable that vehicles are going at 80 kph instead of their usual 100 kph. This is because the general belief is that at 80 kph a vehicle is at its most fuel-efficient run. This, however, affects the “time & motion” factor of deliveries and schedules of employees and companies.

Deliveries are being bundled, synchronized and eventually cause delays or take longer. This in turn affects the quality of products, how soon parts and goods can be used, etc. I also observed that people have cut back on trips, visits, etc. For people who have businesses, farms or satellite facilities, one less visit can result in problems being overlooked, problems not immediately noted or addressed.

The price hike on fuel also increases the mobility cost and therefore the charges levied by professional consultants such as technicians, service or repair crew, veterinarians, etc. Even before you get the “service,” electronic companies and repair crews are already charging you P1,000 to P1,500 to look see or for home service. Since service centers have all but disappeared, you have no choice! Even buying a TV, refrigerator or air conditioner forces you to wait for delivery that is charged to you because appliance stores no longer keep stock, only display items.

All these are just some of the many things that have been affected and continue to unravel because of the fuel price hikes. Unfortunately, the constant pronouncements of the automotive industry that sales have just been great in the last half of the year has misled people to thinking that people have money, are buying cars and therefore can afford to pay high prices for fuel.

The major reason people are buying cars is because the automotive industry and the banking industry have rolled out easy, cheap and fast loans for cars and other vehicles. As one businessman pointed out, all you need is P25,000 to make a down payment and proof of billing and you could drive out with some cheap model. Even businessmen who once frowned upon taking out loans have told me that the terms and conditions are so low and flexible that by the time you make the final payment it is almost equivalent to having a monthly lease.

I remember how during the Ramos administration people also bought into such offers but ended up leaving their cars at home or selling them at a loss because of the fuel prices, exacerbated by horrendous traffic back then. That is where we are right now. Almost unaffordable fuel and snail-like traffic.

Aside from suspending the excise tax, what we need to do is rethink our mobility options and for government to provide support. Motorcycles are the practical option, but the government needs to make dedicated motorcycle lanes. Bike lanes are great, but their numbers are nowhere near motorcycles. The MMDA and the DPWH need to face the fact – we need motorcycle lanes, and we needed them many years ago. That is another thing Speaker Romualdez ought to bite into!

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