Loren seeks review of Malacañang's
"piecemeal approach" to solve price crises

IS IT better for the government to provide the public with a P2 per liter fuel purchase discount or remove the value-added tax on fuel?

Or is it better for the government to provide a p2-billion subsidy to small electricity consumers nationwide or seek a reduction in the cost of electricity?

Sen. Loren Legarda wants to find some comprehensive answers to the two questions, among others, describing as "piecemeal" the government's approach to help the general public cope with the rising costs of food, fuel, and fertilizers.

And so Loren has filed Senate Resolution No. 444 directing the Senate committee on economic affairs to conduct an inquiry into the efficiency of fertilizer, fuel and electricity subsidies in the hope of introducing remedial measures to provide immediate and sustainable relief to Filipino consumers in the face of the continuously rising costs of basic commodities.

In the resolution, she noted that the government plans to spend p3 billion every quarter, in the form of an additional p2 per liter discount on fuel purchases by public utility vehicle drivers, to keep fuel prices down and prevent new transport fare hikes.

Loren also noted that President Macapagal-Arroyo has launched the cash transfer program "Katas ng Vat, pantawid ng kuryente", which will provide p2-billion subsidy to small electricity consumers nationwide.

On top of these, she said the Department of Agriculture will provide each farmer a fertilizer subsidy amounting to P1,500, to be funded by the local government units and the national government.

Be that as it may, Loren said she wanted a review of the efficiency of the government's "piecemeal approach" in providing relief to low-income earners;

"It is likewise necessary to study the viability of lowering, if not removing, the vat on oil and power, as this will provide greater and more stable relief to Filipino consumers, especially to poor households," she said.

"It is also incumbent upon the Congress "to identify, prioritize and institute corrective measures that will provide immediate, effective, sustainable and lasting relief of the Filipino consumers amid the continuing spiralling food, fuel and power costs," she added.

Loren said food and energy prices continued to climb in last month at 10.5 percent, pushing inflation to its highest level since January 1999.

She said the government has introduced fertilizer, fuel and electricity subsidy programs to the poor to cushion the impact of the rising cost of living.

The fertilizer subsidy was meant to assist farmers who will need to buy five to six bags of fertilizers, thus, helping them boost their rice production.

On the other hand, the government will spend p3 billion every quarter, in form of an additional p2 per liter discount on fuel purchases by public utility vehicle drivers, to keep fuel prices down and prevent new transport fare hikes, but this will come from the VAT collections.

Loren said that while the fertilizer, fuel and electricity subsidies aim to cushion the impact of spiralling prices of basic commodities on poor consumers, there is a need for the government to ensure that these subsidies reach their targeted beneficiaries.