ASSIST NEWS COMMENTARY

Palestine Statehood: An untimely push

https://assistasia.wordpress.com/2011/10/05/news-commentary-palestine-statehood-an-untimely-push/

Gays and women in politics make a headstart

https://assistasia.wordpress.com/2011/10/04/news-commentary-gay-and-women-in-politics-make-a-headstart/

Bad governance

https://assistasia.wordpress.com/2011/09/28/bad-governance/

Women targeted in sexual violence in Conflict Situations

https://assistasia.wordpress.com/2011/09/29/news-commentary-women-targeted-in-sexual-violence-in-conflict-situations/

by Paula Bianca Lapuz

On Public Transport and Strikes

Timeline

September 14, 2011 – Transport groups met with President Benigno “Noynoy” Aquino III to air their grievances about the continuous oil price hikes and reported overpricing of oil  in the country. The discussion resulted into the President’s order to review the possibility of repealing the Oil Deregulation Law of 1998. Palace spokespersons shared that the President was very open to dialogue and that he was hoping that the transport groups would abort any plan on mass strikes. Some reports also stated that the transport leaders were satisfied with how the President addressed the issues that they raised  (LEGASPI 2011).

September 16, 2011 – Denying reports of being satisfied with the President’s response to their woes, Pinagkaisang Samahan ng Tsuper at Opereytor (PISTON) stated that they will carry on with their planned nationwide transport strike on Monday, September 19, 2011  (Montecillo 2011).

September 18, 2011 – Palace officials warned PISTON members that franchises can be cancelled once protesters force other drivers to join their strike  (Burgonio and Aning 2011).

September 20, 2011 – Transport groups and other militant organizations pushed through with the massive transport strike but failed to paralyze transportation in nationwide. At least 90% of Public Utility Vehicles in the provinces of Laguna, Cavite, Batangas and Quezon in southern Luzon and in the cities of Davao, Iligan and Cagayande Oro in Mindanao joined the strike  (Bureaus, Cinco and Burgonio 2011).

“Thank you for being part of the problem

This was the response of government officials when sought for feedback regarding the recently concluded transport hike of PISTON. Further, they asserted that the national government and its local units deployed several vehicles to assist stranded passengers where the strike was most felt, showing how clearly prepared the government was for PISTON’s activity yesterday  (LEGASPI, Nation 2011).

Can the government not do anything about oil hikes? Are the protesters seeking a miracle?

Only the House of Congress has the capacity to repeal existing laws. While the President can submit his recommendations to Congress, it is still the latter which will have the final say. Since 1998, the oil industry was deregulated, by virtue of Republic Act 8479 or the Downstream Oil Industry Act. Prior to the enactment of the law, the government subsidizes the differential amount in oil price increases. This, of course, was becoming unsustainable, especially at the time of the Asian Financial Crisis, which the Philippines was not able to avoid as well. At that time, seemingly, debates on how to combat the crisis surfaced and pressures from international creditors such as the International Monetary Fund pushed the government to liberalize the economy, and apparently, the oil industry was the first to receive independence. The question, however, is, did deregulation do us any good? Is there really a silent agreement among big oil payers on the prices that they put over petroleum products? Or is the global market untouchable and are we just at the mercy of oil-producing countries? Oil is a very crucial commodity in every nation’s everyday economic activity. It determines the costs of other basic commodities; and its price has steadily increased since the deregulation.

Since then, the government is pressed by transport organizations to act on the problem, since the commuting public also suffers the price for the unabated increases. A policy analysis conducted by Marlou Mumar in 2009 presented five options for policy action which includes the following:

A) To immediately repeal the oil deregulation law, for the government to assert its sovereign power to have control over the oil industry and economy as a whole.

B) To propose at any international summit or assembly that oil, being a commodity, critical to the continuation of human life, be de-listed as a commodity traded in the futures market, thereby escaping the clutches of unscrupulous people and speculative financial institutions.

C) To initiate immediate steps to establish bilateral contract agreements with petroleum-producing countries of not less than 12 months’ government scheduled deliveries at reasonable, fixed prices.

D) To design a comprehensive energy development program, such as nuclear power plant being the most cost-efficient source of energy to date, for the purpose of freeing our country from complete dependence on imported energy sources. To this end, moratorium on foreign debt must be taken into account as a paramount fiscal strategy  (Mumar 2009).
Feasibility/Practicability of Options

A: Repeal of the oil deregulation law – Mumar suggests that a debt moratorium should be put in place so that a tighter fiscal policy can address the subsidies for oil purchases of the country. This is ideal but is far-fetched. The fact remains that the Philippines is an oil importing country which ultimately places the country in a disadvantageous position in terms of acquiring oil from overseas. Added to this fact is that the President is from the Liberal Party. And more and more, the government is showing its consistency with its party ideology, take for instance, the support it gives to Public-Private Partnerships as a developmental strategy, which clearly recognizes the role of the private sector in national development. So option A, though ideal, is not feasible.

B: Delist oil as a commodity traded in futures market – this is very feasible. If countries at the Association of Southeast Asian Nations will be able to support any such appeal, this will be remarkable, and whether the oil industry in the country is deregulated or not, will not make any much of a difference, if prices will go down at the global market will go down. The Department of Transportation and Communications (DOTC) and the Department of Energy (DOE) will just have to ensure that no collusion will take place among the big oil companies. This is very doable, but this is out of the Philippine government’s control.

C: Establish bilateral agreements between the Philippines oil producing countries abroad – of course, we can always try. But the likelihood of striking a deal is close to impossible, unless the Philippines is as big and as influential as China or India or South Korea.

D: Explore alternative sources of power, particularly nuclear energy – Nuclear energy is cheap but will not be able to cut down our dependence on oil drastically. Nuclear power can provide energy for electricity but it will not do so much for agriculture, transportation, etc. And with the recent disaster in Japan, this option can be set aside for now.

Evidently, policy options for the oil crisis are limited, especially when prices are dictated by market forces. At the minimum, what can be explored is a PPP model for public transport, taking from the experience of the South Korean government, which has effectively reduced traffic in Seoul by putting public funds in the improvement of the public transport system, and allowing the private sector to manage the bus-system facility. Except in the Philippines, more money could come from the private sector. There should be a moratorium on the increases that the private sector can make, and drivers should receive fixed salaries based on their performance and not on the amount of passengers that they can get.

In truth, this can actually change the way of life of every Filipino. As one DLSU Professor July Teehankee notes, if only the government can provide a reliable public transport system, Filipinos can arrive on time in terminals and follow rules. Likewise, public transport vehicles can leave on time, without worrying about meeting daily quotas.

Of course this does not make things any simpler, but it is insightful to note also, initiatives of the Department of Labor and Employment (DOLE) that aims to provide performance-based fixed salaries to bus drivers to minimize accidents that involve Public Utility Buses. This can be extended to jeepney drivers. But a more thorough study should be conducted on this proposal.

Generally, the problem on oil crisis will not see any quick solutions, especially when oil is fast depleting in oil producing countries. Government subsidy will suffice but the government must step in, at least in ensuring regular salaries for public utility vehicle drivers.

Works cited

Bureaus, Inquirer, Maricar Cinco, and TJ Burgonio. News. September 19, 2011. http://newsinfo.inquirer.net/61613/metro-strike-fizzles-out (accessed September 20, 2011).

Burgonio, TJ, and Jerome Aning. “Palace warns strikers; Drivers told: Don’t force others to join.” The Philippine Daily Inquirer, September 18, 2011.

LEGASPI, AMITA O. Nation. September 19, 2011. http://www.gmanews.tv/story/232798/nation/palace-transport-strike-affected-very-very-few-people (accessed September 20, 2011).

—. Top Stories. September 14, 2011. http://www.gmanews.tv/story/232397/nation/aquino-orders-review-of-oil-deregulation-law (accessed September 14, 2011).

Montecillo, Paolo G. News. September 16, 2011. http://newsinfo.inquirer.net/59461/piston-going-it-alone (accessed September 20, 2011).

Mumar, Marlou. Energy. January 29, 2009. http://ezinearticles.com/?Philippine-Oil-Deregulation—A-Policy-Research-Analysis&id=1915890 (accessed September 2011, 2011).

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