Cayetano: Government not helpless in power rate hike

By Office of the Senate Majority Leader
December 19, 2013

PASAY CITY – Senate Majority Leader Alan Peter “Companero” S. Cayetano said that the national government is not helpless in protecting the Filipino public from the looming power rate hike brought about by the temporary shutdown of the Malampaya gas project.

“Maraming iba’t ibang solusyon… But the government has to be willing to give, not only to take..." Cayetano said.

Cayetano has been asking the government to look for “creative solutions” to cushion the effects of the power rate hike, saying that the Filipino public cannot bear the burden of the rising prices of commodities.

Cayetano earlier proposed that a “floating” VAT rate be implemented to cushion the effects of the power rate increase, explaining that the government can reduce the VAT rate on power to 6% or 9% whenever the power rates are high, and correspondingly restore it to 12% when rates are low.

“Sa tao, ang mawawala, 12%. Pero sa gobyerno, hindi 12% ang mawawala kasi sinisingil naman nila ang input-output ng VAT," he said.

"Sa sinasabi ni Commissioner Henares, halimbawa, na mawawala ang P5B sa gobyerno kapag binaba natin ang VAT, but if prices increase by 5%, you lose P5B anyway, so bakit natin papahirapan pa ang mga tao para lang di maapektuhan ang revenue ng gobyerno kung yun din ang magiging resulta sa dulo. So wouldn’t we rather prevent an increase in electricity, petroleum, transportation, and other basic necessities now so that prices next year would not go up?” Cayetano said during the hearing.

Aside from implementing a floating VAT rate, Cayetano also proposed that the government suspends the collection of the taxes on natural gas for three months.

“The Congress can work on removing the tax on natural gas, which stands at P1.46/kWh. Kung tatlong buwan nating hindi sisingilin ang tax para dito, makakatipid tayo ng halos P4.50/kWh. Mas malaki na iyan sa P4.15/kWh na itinaas ng kuryente ng Meralco. Ang mangyayari sana, walang itataas ang kuryente,” Cayetano explained.

Government take in rate hike is P0.70 per kwh

In fact, Cayetano said that the government is poised to collect some 70 centavos in Value-Added Tax (VAT) out of the P4.15 per kwh increase in electricity rates that Meralco has earlier requested.

“We discovered today na hindi lang ang mataas na tax ang nakakadagdag. Dito lang sa P4.15 [na increase per kwh], almost P0.70 ay sa gobyerno din pala mapupunta,” the senator said during the hearing of the Senate Committee on Energy on the power rate increase.

“Itong gobyerno, sinasabi, pasensya na dahil pribadong sektor iyan, anong magagawa nila, may ERC. Iyun pala ay kumakabig din ito ng P0.70.” he noted.

“In a way, mas gusto din pala ng gobyerno na mas mataas ang presyo ng petrolyo at gasolina dahil mas marami ang tax na makukuha nito.”