Press Release
May 6, 2006


Senate Minority Leader Aquilino Nene Q. Pimentel, Jr. (PDP-Laban) today batted for the grant of state incentives to manufacturers of coco-diesel and ethanol, as well as flex-fuel vehicles, to hasten the production of alternative, renewable indigenous sources of fuel and make them competitive in the market and affordable to ordinary motorists.

Pimentel said the incentives, which will be in the form of tax break, loans to manufacturers and subsidy, will be incorporated in the Bio-Fuels Act that is being deliberated by Congress with the support of Malacañang .

The grant of incentives will facilitate the shift to so-called green fuel from our dependence on crude oil and save millions of dollars that we can otherwise use for education, health and other social services, he said.

Pimentel, one of the authors of the Bio-Fuels Act, backed the grant of tax exemptions for the importation of equipment that will be used in the commercial production of coco-diesel and ethanol. He said government financial institutions will likewise be required to extend loans to manufacturers of these alternative fuels.

He said that the shift to coco-diesel and ethanol (ethyl alcohol) is very advantageous to the Philippines because they are sourced from agriculture products that abound in the country.

Coco-diesel is derived from coconut oil while ethanol is extracted from sugarcane, cassava, corn or potato.

In other words, we will not run out of the basic raw materials from which coco-diesel and ethanol may be produced. They are replaceable commodities, as far as we are concerned, the lone senator from Mindanao said.

Noting that the country imports $3.9 billion worth of crude oil and petroleum products a year, Pimentel said the shift to bio-fuels will not only save enormous amount of foreign exchange but also alleviate pollution and provide cleaner air for the people to breath.

He said that if Brazil and Thailand have made inroads in making ethanol as substitute transport fuel, there is no reason why the Philippines cannot do it.

Pimentel said he was told by sugar planters from Negros Occidental that many sugar bills in the Western Visayas can be converted into ethanol plants with assistance from the government at a cost of $1 million (about P51 million) per plant.

The cost of converting existing sugar mill into ethanol mills is manageable and with political will, it is something that the government can very well afford to guarantee as loans to the sugar mill owners, he said.

Part of the program to promote the use of bio-fuels, according to Pimentel, is the retrofitting of engines or retooling the motor vehicles that will use ethanol as fuel additive.

He said the shift to ethanol fuel can be done incrementally as Brazil and Thailand are doing so that car manufacturers can redo their vehicles and adjust to the shift.

Pimentel said car owners can attest to the fact that adding ethanol to gasoline enables the engine to burn the fuel more efficiently.

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