Press Release
January 31, 2008

REVILLA SUPPORTS SUSPENSION OF EVAT ON OIL

Amid the public clamor, administration Senator Ramon "Bong" Revilla Jr. threw his hat of support to the proposal to suspend the 12 percent expanded value added tax (EVAT) on petroleum products.

This, according to Revilla, is aimed to provide a quick relief to the people in the unhampered rise of oil prices.

The senator said the government should be sensitive and responsive to the needs of the public who have to bear the spiraling prices of oil and other petroleum products after it reached a record high of $100 per barrel.

"We must address this problem with fast and concrete actions. A higher price of petroleum products in the local market will create a domino effect. The price of other products and businesses will surely increase. We are bragging of rising economy which is still to be felt by ordinary citizens. How can we justify it if the public will endure another oil price hike and its effect to other products?" Revilla explained.

He noted that a women's group filed on Wednesday (January 30) a signed petition with the House of Representatives to suspend the VAT on oil.

"Despite the declared reduction of diesel prices by some local oil companies, many sectors continue to demand the suspension of the VAT on petroleum products. The slight reduction is not the solution because market forces will still prevail. We are still slaves to market forces, and I am quite sure that a reduction of four pesos per liter in the price of oil will not happen with out this intervention, "he added.

The lawmaker said the government may suspend the 12 percent EVAT on oil for a definite period of time and re-assess the situation afterwards if it would be feasible to re-impose it. "In effect, we want to empower the constituency in determining their priorities in spending. If we suspend the EVAT on oil, the four pesos saving per liter will be added to a consumer's purchasing power," he said. Revilla earlier expressed sympathy with transport groups denouncing the loopholes on the implementation of Republic Act (RA) 8479, otherwise known as the Downstream Oil Deregularization Act, as he filed a resolution to probe the continuous increases of oil prices in the domestic market.

He stressed that there is a justification on the part of transport organizations when it expressed suspicion that there is a continuous cartel operation in the local oil business.

Revilla said the lack of full enforcement of RA 8479 contributes to the skepticism of transport groups that there is an existence of a local oil cartel that dictates the prices of petroleum products in the country.

"The government had encouraged new partakers in the local oil industry but it is not fully successful because the new stakeholders do not have its own refining facilities and there are still allegations of price dictatorship," Revilla pointed out.

In filing Senate Resolution No. 224, Revilla pointed out that the United Nations noted recently that the Philippines is among the countries that are most vulnerable to oil price shocks.

"There is a general clamor from the people that the government has no credible energy program that will lessen the impact of oil price hike on the domestic economy and people's livelihood," he said.

Revilla also urged the government to be aggressive in pursuing other alternative energy resources, aside from already mandated blending of ethanol and gasoline, to further reduce the country's dependence on imported oil.

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