The chairman of the House Ways and Means Committee on Friday said energy independence is a national imperative in the administration’s pursuit of an independent foreign policy to help insulate the Philippines from international crises.
In an aide-memoire addressed to President Rodrigo Duterte regarding the socio-economic implications of the US-Iran tensions to the Philippines, Albay Rep. Joey Salceda said the present crisis shows the country’s economic prospects will remain affected by overseas conflicts for as long as the economy remains fueled by foreign oil.
“This dependence on other country’s oil output diminishes the country’s efforts towards independent foreign policy,” Salceda said.
“In the long-term, the country’s push towards robust economic and political self-determination will depend in large part on whether we can create our own sources of energy,” he added.
Salceda cited that the latest Brent crude spot prices stood at USD67.05 per barrel as of the first week of January.
He noted that current market speculation alone could drive prices up to the USD70 to USD75 territory, stressing that this could lead to a PHP0.9 to PHP2.6 increase in oil prices per liter.
“The economy’s ability to absorb this impact will depend on how long it takes before tensions are resolved but should oil prices for 2020 settle around this territory, inflation might rise by 0.2 percent above baseline, all other things kept equal,” he said.
The lawmaker suggested that the government could start with the sustainable and efficient use of its existing renewable energy sources.
He recommended that in the longer term, the nation must seriously consider the nuclear option and the exploration of new energy sources especially in the West Philippine Sea under a modus vivendi with China as it will be “vital” to the country’s economic ambitions.
He said he has filed House Bill 1031 which provides a framework for nuclear energy regulation, and the House is prepared to champion the President’s agenda for energy independence.
Salceda said his panel will continue to monitor oil prices, but he currently sees no need to suspend fuel excise taxes under the Tax Reform for Acceleration and Inclusion law.
Proposals to suspend these taxes can be entertained if other fiscal measures such as the taxes on Philippine Offshore Gaming Operations are passed to provide a fiscal breathing space for revenue-negative measures, he noted. (PNA)