📷 SDGS-Philippines
National Economic and Development Authority (NEDA) Chief Arsenio Balisacan said on Monday that implementing subsidies for oil and electricity would only benefit the rich, as they are the largest consumers of these utilities.
Balisacan said this on the sidelines of the Philippine Economic Briefing in Pasay City after San Miguel Corp. (SMC) President and CEO Ramon Ang pointed out in a panel discussion that fuel and power prices in the Philippines are higher than in neighboring countries due to those countries providing subsidies.
“If you look at it on an equal basis, our prices without the subsidy and without taxes, is even lower than Malaysia, Indonesia, and Thailand. It’s also the same as power. Our power generation compared to our neighboring countries are lower but we impose taxes on the power sector and fuel and we also don’t give subsidy on power that’s why our power prices are higher,” Ang said.
In response, Balisacan said the government would rather provide direct subsidies to vulnerable sectors. He cited the experience with the Oil Price Stabilization Fund (OPSF), where companies contributed during low oil prices and withdrew when prices were high, resulting in a budget deficit.
“We have been there before. I think our approach is not to subsidize oil generally but what we can subsidize (is the) vulnerable sector,” Balisacan told reporters.
“I think we should avoid subsidizing power, electricity, fuels generally, because the biggest consumers of fuels, for example, are the rich. The biggest consumers of electricity are the rich, so if you subsidize those, who benefits?” Balisacan added.
Balisacan also mentioned that the government currently offers targeted subsidies. He added that these subsidies will be enhanced through the implementation of a digitalization program aimed at providing a national identification card for Filipinos.
“We should be able to perfect targeting. ‘Yung tina-target natin na matulungan, ‘yan talaga ang matutulungan. But we can save a lot of fiscal resources and avoid potentially serious problems like fiscal crises as what happened in the past when you have oil price stabilization fund,” he said. (TCSP)
