Use Malacañang’s P68 Billion Pork Barrel For Oil Subsidies – Pamalakaya

Pamalakaya clarified that the re-channeling of Aquino’s audit free pork barrel is an immediate measure to provide relief to sectors affected by the oil price spike.


Use the president’s pork barrel to cushion the impact of oil price increases.

This was the call made by fisherfolk alliance Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) in the immediate aftermath of continued oil price hikes because of the escalating crisis in countries in the Middle East.

Pamalakaya said President Benigno Aquino III’s audit-free P 68-billion ($1.57 billion) presidential pork barrel fund can and should be utilized as an oil and production subsidy fund to protect direct oil consumers from the impact of the oil price increases.

Late last year, the House of Representatives passed the P 1.645 trillion ( $38 billion) national budget for 2011 and gave Malacanang P68 billion in pork barrel funds representing lump sum and unprogrammed funds.

According to a report of the independent think tank Ibon Foundation Inc. the presidential pork barrel fund is 27 percent of the total P 245 billion ($5.66 billion) lump sum and unprogrammed funds and 15 percent of the national budget.

The group said highly vulnerable sectors such as public transport drivers, small fisherfolk and ordinary consumers are in immediate need of protection.

“President Aquino should give up his audit free P 68-billion pork barrel and allow it to be used as oil and production subsidies for jeepney drivers and small fisherfolk. Since the Aquino government and officials of the Department of Energy seem to be allergic to any and all recommendations that they curb the greed of oil companies , which are taking advantage of the chaos in the Middle East, the president should give up his pork barrel to rescue the public from the effect of oil price hikes,” said Pamalakaya national chair Fernando Hicap said in a press statement.

Hicap suggested that the P 68-B audit free Aquino pork barrel be divided into three segments: a P 28 billion ( $647 million) oil production subsidy for small fisherfolk, farmers and other agricultural producers using petroleum products; a P 20 billion ($462 million) subsidy for for jeepney drivers; and the last P 20 billion for other vulnerable, impoverished sectors severely affected by the rising prices of food, oil, and services.

Pamalakaya clarified that the re-channeling of Aquino’s audit free pork barrel is an immediate measure to provide relief to sectors affected by the oil price spike.

“Aquino should also impose price control on oil products and order the removal of the 12 percent expanded value added tax imposed on oil products. In the meantime, it’s long overdue that an honest-to-goodness investigation of the books of oil companies be conducted. Shell, Caltex and Petro have long been accused – rightly so – of price manipulation and overpricing activities,” said Hicap.
The fisherfolk leader, however, insisted that the best solution to the country’s chronic and ever-worsening oil problems is the immediate repeal of the Oil Deregulation Law.

Oil price Burden to the fisherfolk

In the meantime, Hicap said fisherfolk are well-justified in calling for an end to oil price hikes and the implementation of more decisive reforms to put an end to the “theft” of oil companies.

“Because of the relentless oil price hikes, us fisherfolk are forced to come up with P520 ($12) for every fishing trip. Petroleum products eat up 90 percent of the total production cost per fishing. We use at least 10 liters of regular gasoline or diesel per fishing trip,” he said.

“Because of the continuing increases in the prices of oil and petroleum, many fisherfolk are forced to stop fishing or lessen the number of fishing trips they make. This is a very serious blow against the livelihood of fisherfolk. The government must reduce the prices of petroleum products by at least one third or one-half of the current price if it has any concern for fisherfolk.”

Based on recent reports, the average price per liter of petroleum products is pegged at P55 ($1.27) per liter this month. Because of this, Hicap said, fisherfolk would be compelled to reduce fishing hours from an average of 8-12 hours per fishing trip, to four to eight hours.

“This or abandon fishing for the meantime due to high prices of oil products. Imagine the effect on thousands of families who rely on fishing for their survival,” he said.

During the height of successive hikes in petroleum products in 2008, commercial fishing operators complained that 65 percent of their production cost went to fuel consumption.

Commercial fishing vessels were forced to stop operations in 2008 due to oil price hikes. The same year, commercial fishing operators laid off 50,000 commercial fish workers in 14 tuna canneries in Western Mindanao because of high prices of petroleum products. Other canneries downsized their operations. The 12 percent expanded value added tax on oil products was also a culprit behind the austerity measures.

According to Pamalakaya, the weekly price hikes have also forced small fishermen operating small motorized boats to reduce fishing hours from the usual eight to 12 hours, down to four to eight hours. A significant number of fishermen cut fishing activities per week from six days a week, to three to four days weekly.

Bill to Repeal Oil Deregulation Law Filed

In the meantime, Anakpawis party-list Representative Rafael Mariano on Wednesday filed House Bill 4317 or “An Act Repealing Republic Act 8479, otherwise Known as An Act Deregulating the Downstream Oil Industry.”

Mariano said oil companies have abused the deregulation law at the expense of consumers and the rest of the economy.
According to the lawmaker, oil companies amassed billions in profits over the years. He said that in list of top 1000 corporations in the Philippines for the year 2009, Petron Corp. placed first with recorded gross revenues of P268.8 billion ($6 billion at the 2008 exchange rate of $1=P44.47) in 2008, 26.2 percent higher year on year. Two other oil companies, Pilipinas Shell Petroleum Corp. (2nd) and Chevron Philippines, Inc. (5th) made it to the top five of the list.

“Petron, Shell, and Chevron as well as new oil players have long been manipulating oil prices. They have been consistently overpricing oil products using the fluctuating world crude oil prices and peso-dollar exchange rate as an excuse,” he said.
Mariano said that now, the oil triumvirate is exploiting the political unrest in the Middle East and North Africa to further squeeze profits from the Filipino people.

“ The Aquino administration pretends to be helpless in the wake of surging oil prices. The president previously declared openness in amending the oil deregulation law, but he did not order its review as a priority in the agenda of the (Legislative-Executive Development Advisory Council),” he said.

Buffer Fund for the Oil Industry

Finally, Mariano said that immediate and long-term remedies to the country’s oil woes are already available if the Aquino government would only deign to listen. He cited a study entitled “No hope for fair prices under the deregulation” by analyst Arnold Padilla wherein the travails of oil deregulation was narrated and alternatives to it were laid out.

In the study, it was said that a buffer fund is needed and that it is possible to establish a buffer fund without passing on the burden to taxpayers and consumers.

“One way of doing it is for the buffer fund to be financed by government earnings and savings from its increased participation in a regulated downstream oil industry,” Padilla wrote.

Under a regulated oil industry, the government will become the exclusive importer of crude oil and petroleum products. The country can then expand potential oil sources and shop for the cheapest available oil. Bilateral agreements with state-owned companies from oil exporting countries may be pursued under special arrangements, including commodity swaps, which can provide the country considerable discounts.

“The national government should also participate in storing, refining and retailing oil products in the country and use whatever earnings it will generate from these activities to finance the proposed buffer fund. Initially, the buffer fund can be financed through allocating a portion of the national budget and when un-utilized within the fiscal year should be carried over to the next fiscal year.” (

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