Price freeze effectivity indefinite

In an apparent attempt to placate business groups urging the Palace to end price controls, officials announced on Tuesday that the President would lift Executive Order 839—but they did not say when exactly.
The order was issued in response to the calamities in Luzon brought about by tropical storm Ondoy in late September and Typhoon Pepeng in early October. The order—which covers pump prices and cooking gas—effectively rolled back prices of key commodities to pre-calamity levels.

Earlier, various business groups, including the Philippine Chambers of Commerce and Industries (PCCI) and the Joint Foreign Chambers of Commerce, argued that the Executive Order should be lifted as it would have negative impact on supply and the investment climate in the Philippines.

On Tuesday, Lorelei Fajardo, deputy presidential spokesman, said that Justice Secretary Agnes Devanadera and officials of the Department of Energy [DOE] had met on Friday with the business community led by the PCCI for a series of consultations on their appeal.

“There will be a continuous dialogue and consultation. But for as long as there is a calamity in Luzon, then the price control will remain,” Fajardo said.

But she noted that the Department of Justice-Department of Energy Task Force assigned to look into the appeal of business community to lift the oil price freeze may also review the price ceiling, considering that oil is an imported product and pump prices depend heavily on prices in the global market.

“The Department of Energy can keep track and monitor the prices of oil and make the necessary recommendations,” she said.

Talking, not surrendering

Fajardo said that talking to the chambers does not mean that government was relenting on its position on the Executive Order.

“We have mentioned the considerations like oil, and it is an important product. The government understands the plight of the oil companies because they are following the prices dictated by the global market,” she added.

“We’re not saying [that] we are changing positions, but it [the call to lift the order] may warrant the review. So all of this will be the basis of the recommendation of the task force before the President makes a decision,” she said.

Fajardo stressed that the primary concern of President Gloria Arroyo was the plight of the majority of citizens affected by the calamity and not just the business sector.

Earlier, the Management Association of the Philippines (MAP) told The Manila Times that over time, the Executive Order would harm consumers that it aims to protect. The association, which is against profiteering and hoarding, explained that the order could create a black market and seriously affect oil supply.

Also, the Bangko Sentral and Pilipinas (BSP) also warned that the Executive Order could be harmful in the long run and may even drive up prices.

Odd defender

Opposition Sen. Francis “Chiz” Escudero sided with the Palace on Tuesday, also saying that the government should not back down from the pressure from businesses and other interest groups to lift the oil price freeze in typhoon-affected areas.

“The current turmoil in the global economy has seen governments taking on a more activist, regulatory role. We can do no less,” Escudero said in a statement.

“Our country’s poor and dwindling middleclass bear the burden most, and they constitute a far greater portion of the population. Why can’t these oil companies wait until our people have recovered from these disasters? This is, after all, a remedial and temporary action by government,” he added.

Also in the statement, Escudero called for the scuttling of the Oil Deregulation Law. “The law has become an artifact. We have to act quickly before the forecasts of oil prices soaring, once again, above the $100 level become a reality when the global economy recovers from today’s crisis,” he added.

Speaker’s statement

In a seeming reversal of roles with Escudero, however, House Speaker Prospero Nograles, a key Palace ally, said also on Tuesday that he was agreeable to a temporary lifting of Executive Order 839.
But the Speaker clarified that oil firms should first disclose their inventories and importation records to justify the lifting of the order.

He added that he recognizes the need to balance public welfare and a healthy business environment, but government must also assert its will to protect citizens from abusive business practices, including cartelization and alleged manipulation of pump prices.

“I understand that business is for profit, but raking in unreasonable profits at the expense of public interest and when the public is left with no or little choice is absolutely unconscionable,” Nograles said.

Angelo S. Samonte with reports from James Konstantin Galvez And Jomar Canlas