Enrile bears down on oil firms’ ‘profiteering’

By Angie M. Rosales

10/10/2008

Administration Sen. Juan Ponce Enrile yesterday practically lashed out at the local oil companies for allegedly gaining for themselves too much profit at the expense of the consumers as he demanded for them to roll back the present prices of their petroleum products by as much as P4 per liter, saying their having cut down their costs by a “measly” P1 was not enough.

As he voiced support to the calls for the oil companies to scale down their retail prices, Enrile issued a warning to oil companies “not to push their luck” because he will not hesitate in having a colleague in the House or Representatives introduce a bill that would seek the imposition of a “windfall tax” if they continue to rake in huge profits by holding back on the necessity to roll back their prices.

“I will ask somebody to file a bill in the lower House when I file a counterpart bill here and wait for that bill to pass,” Enrile told the media in an interview.

Under the Constitution, all tax measures are mandated to emanate from the House of Representatives.

Enrile stressed that even if the country’s oil industry was deregulated, oil companies can not maintain high prices of their products while the prices of crude in the world market have gone down.

“If they will not lower their prices at a level commensurate to below $80 crude price (in the world market), that means they are taking advantage of the consumers. So, it would be justified for them to be imposed with excess profit tax,” the senator said in a mixture of English and Filipino.

Enrile said if the oil firms continue with their “abuse,” he might move to have their net profit imposed with a 90 percent profit tax.

He said he is studying to have oil companies slapped with an “excess profits tax” whenever their profit reaches 20 percent of their investment.

Meanwhile, Senate ways and means committee head Francis “Chiz” Escudero expressed opposition to the imposition of additional taxes on cigarettes and liquor, saying such a move is not the correct approach for the government to be able to weather the looming fallout of the US financial crisis.

“That’s the problem with us, instead of a bailout to help Filipinos weather the US financial fallout, we are planning to impose new taxes on our people,” Escudero said in a radio interview.

He rejected the Executive branch’s argument that the revenues to be generated from the so-called “sin taxes” will financially prepare the government when the effects of the US financial crisis hit the country.

“The cause of the US’ financial crisis is the credit crunch. People and institutions do not like to borrow anymore, banks and investment houses do not have money to lend and the people do not want to spend. If we impose new taxes, the people will have less money to spend,” he asserted.

Escudero also disputed the government’s claim that imposing additional taxes on tobacco and liquor will eventually result in a physically healthy nation as the taxes, in consequence, would make them shun these products.

“If the health of the people is really their goal, they (government) should say so, because there are more effective ways to do that (stop the people from buying and consuming alcohol and cigarettes) than imposing stiff taxes on these products,” he said.

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