Better 'ayuda' needed amid oil price hikes, IBON demands

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MANILA, PHILIPPINES - APRIL 07: A social worker takes a picture of a resident receiving ayuda (cash aid) on April 7,2021 in Manila, Philippines. Each resident is entitled to 1,000 pesos ($20), with a limit of 4,000 pesos ($80) per household. Some 24 million people in Manila and nearby provinces remain under strict lockdown, the longest in the world, as the worst COVID-19 surge in Southeast Asia continues to hammer the country's healthcare system. The Philippines has confirmed more than 813,000 cases of COVID-19 so far, with nearly one in four people being tested turning out positive. (Photo by Ezra Acayan/Getty Images)
FILE PHOTO: A social worker takes a picture of a resident receiving ayuda (cash aid) on April 7,2021 in Manila, Philippines. Each resident is entitled to 1,000 pesos ($20), with a limit of 4,000 pesos ($80) per household.(Photo by Ezra Acayan/Getty Images)

With oil prices up and employment rates down, IBON Foundation calls for the national government to go beyond providing “measly” ayuda (financial aid).

“ [...] the economy has not yet recovered from the pandemic and is unable to generate regular or permanent work for millions of jobless Filipinos. Even those in irregular or informal work are losing their jobs and joining the millions of discouraged workers discounted from the labor force,” the group said on Friday (March 18).

IBON’s report came during the 11th week of oil price hikes, which was met with protests from jeepney drivers, farmers, fisherfolk and other sectors across the country. Per the Department of Energy (DOE) last Tuesday (March 15), prices for diesel, gasoline, and kerosene have increased by P12 to P13.25, P7.10 to P7.20, and P10.50 per liter, respectively.

In analyzing Philippine Statistics Authority (PSA) data from December 2021 and from January 2022, they said that the number of labor force participants dropped from 49.5 million to 45.9 million. Meanwhile, the number of employed individuals decreased from 46.3 million to 43 million.

At the same time, while the number of individuals working for less than 40 hours fell from 16.8 million to 13 million, self-employed individuals working “without any paid employee” dropped from 12.9 million to 11.4 million.

Outgoing Pres. Rodrigo Duterte approved the Department of Finance’s (DOF) plan to provide a monthly P200 financial aid (with Duterte now ordering DOF to raise it to P500) that IBON said would be given to the 50% poorest Filipino households.

The group blasted this move, saying that “the [P3 billion] in fuel [subsidies] is also limited, going only to 377,443 qualified beneficiaries in the transport sector, and 158,730 corn farmers and fishermen. This token assistance is not enough to cushion the effects of soaring fuel prices and leaves out millions of Filipinos in need.”

Believing that the continued oil price hike will worsen the national job crisis, IBON called for the government to reevaluate the distribution of public funds.

“Instead of prioritizing funds for non-urgent infrastructure and debt servicing, it could realign hundreds of billions of pesos to social assistance and afford to give each of the 18 million poorest families Php 10,000 for at least two months if it really wanted to,” IBON concluded.

Running on empty

Although a price rollback took place on Tuesday, IBON Executive Director Sonny Africa said that more problems will come if the ongoing Ukraine-Russia conflict goes any longer. According to him, this was partly because of Russia’s place as “the world's third largest oil producer and second largest oil exporter,” as well as the Organization of the Petroleum Exporting Countries (OPEC) deciding not to increase production.

“The longer the conflict and the higher the prices, then the bigger the hit on the domestic economy. Household consumption dampened by record joblessness and income losses will be even more depressed. On the supply side, small businesses will find it even harder to recover,” Africa told Yahoo! Philippines.

Although Africa added that the Philippines would not be directly affected as 73% of the Philippines’ oil supply comes from the Middle East, the conflict will heavily influence the prices in the global oil market. As an example, he said that when the price for Dubai crude oil rose to $10 (at the time of the interview), it would be bought at P5,500 per barrel at the exchange rate of P51.47 per American dollar.

He continued that this would then be felt worst by about 18.4 million Filipino families who have already lost their savings, and the other estimated three million who lost theirs because of the national government’s “destructive” COVID-19 lockdowns.

“Any price increase means that they will consume less and household welfare will worsen even more from their already low levels,” he worried.

Meanwhile, Anakpawis Party-list Vice President Lana Linaban speculated that fruits, vegetables, rice, fish, and meat in different corners of the Philippines will be even more expensive due to the hikes. She then slammed oil companies for profiting from the crisis.

Ang mga stock ngayon ng langis ay hindi nabili sa sinasabi nilang mataas na presyo ngayon kundi sa mas mura pa noong mga nakaraang buwan, kaya, malinaw na desisyon lamang ng mga negosyante na itaas ang mga ito at hindi dahil sa antas ng kanilang pinuhunan,” Linaban said.

(“The stocks of oil today were not bought from at current high prices , but from cheaper ones from the past months. As such, it’s clear that this was a decision by business people to jack the prices up and not because of actual higher procurement rate.”)

In wrapping-up their points, both Africa and Linaban called for the immediate junking of policies such as the Oil Deregulation Law and the Tax Reform for Acceleration and Inclusion (TRAIN) Law. While the latter imposed excise taxes on diesel, gasoline, kerosene, and even liquefied petroleum gas (LPG), the former removed government influence on oil pricing and trading. The Oil Deregulation Law also has two versions: the original version from 1996 (declared unconstitutional by the Supreme Court [SC] in 1997) and the one approved in 1998.

Saying that the ultimate solution is “to aggressively shift our energy mix towards renewables and energy self-sufficiency,” Africa also suggested deprivatizing Petron to ease the crisis. The oil company was originally government-owned before being sold bit by bit to private sectors in the early 2000s.

“More strategic steps to help the country cope with the vicissitudes of the global oil market include greater transparency in [oil] pricing on the part of the oil companies, returning [government] powers to more actively regulate oil prices, centralized procurement of oil to be able to negotiate better prices, and returning Petron to [government] hands to give it a concrete mechanism for intervening in the domestic oil industry,” Africa ended.

Africa reiterated that one way to help affected Filipinos is for the national government to provide a P10,000 financial aid “at least twice and maybe even three times” to aid small businesses.

Linaban then blasted the Oil Deregulation Law, calling for collective action against those taking advantage of the oil price hikes.

Sa dulo, kaya naman ito nagaganap dahil sa umiiral na Oil Deregulation Law, na nagbigay 'kalayaan' sa mga kumpanyang monopolyo na magtaas ng presyo, kahit nakalubog na sa kahirapan ang mamamayang Pilipino. Ito ang pinakaugat ng krisis pang-ekonomiya ngayon na dapat ipanawagan ng mayoryang maralita,” Linaban slammed.

(“In the end, this is happening because of the Oil Deregulation Law, which gives ‘freedom’ to monopoly companies to initiate price hikes, even if Filipinos are drowning in poverty. This is ultimately the root of the current economic crisis that the everyday poor Filipino has to deal with.”)

Reuben Pio Martinez is a news writer who covers stories on various communities and scientific matters. He regularly tunes-in to local happenings. The views expressed are his own.

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