POSTSCRIPT / June 16, 2009 / Tuesday


Philippine STAR Columnist

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Gov’t can flush out flu cases by footing the bill

FLU BREAKOUT!: The opening of classes yesterday that saw millions of students trooping back to school has exposed the high incidence of Influenza A(H1N1) cases in the countryside.

The count rose yesterday to an alarming 193, with indications that it could go much higher. The Department of Health finally had to admit the first community-level outbreak in a barrio in Jaen, Nueva Ecija.

Instead of waiting for what looks like an inevitable rise in the number of flu cases and then simply reacting, cannot the government quickly flush out the silent or unsuspecting victims by announcing that it will pay for the expenses of diagnosis and treatment of all flu patients?

Many Filipinos are scared of the high cost of treatment and medicines, so they keep their health problems to themselves or resort to self-medication. While they quietly carry the virus, they unwittingly spread it.

Malacañang should announce immediately that the government will pay for the treatment and medicines of A(H1N1)cases without exception!

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CHEAPER POWER: In the Congress, instead of dwelling on the half-baked constituent assembly plan of congressmen or the sex videos of horny cosmetic surgeons, Senate President Juan Ponce Enrile is focusing on lower electricity rates.

In case you have forgotten, reducing electricity rates was one of the campaign promises of the senator.

Enrile is pushing two bills slashing taxes on power generation and distribution and then passing on to consumers the savings amounting to a minimum of P1 per kilowatt-hour for residential users, and between P1.32 to P2 per kwh for industrial firms.

His twin measures — SB 3147 or the Uniform Franchise Tax Act and SB 3148 or the Electricity Rate Reduction Act — are now with the Senate committees for study and refinement.

Batting for a policy shift on the taxing of power firms, Enrile points out that government has been collecting excessive taxes on generation companies (Gencos) and distribution utilities (DUs) when this should not be the case.

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BURDEN, NOT SERVICE: Public utilities all over the world, Enrile says, are never major sources of state revenues. In the Philippines, however, the government imposes taxes on them that are so burdensome that the firms are forced to pass them on to consumers.

Given the hard times and the weakened competitiveness of local industries using power, he says it is time the Philippines imitated more progressive countries in their treatment of basic needs, such as electricity, as a public service and not as a main revenue source.

“There should be a paradigm shift that will see Filipinos enjoying electricity more as a public service, not as a public burden,” he says.

“Providing cheap electricity is a public service,” he stresses, “That is why government collects taxes — so it can perform that public service.”

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ONEROUS TAXES: At present, government charges power utility firms a 12-percent value added tax (VAT) on top of a 32-percent corporate income tax, plus a local franchise tax on their gross receipts.

Under SB 3147, Enrile proposes that in place of all taxes, government should charge only a uniform three-percent franchise tax on the distribution income of DUs.

Enrile clarifies that this measure will not benefit such power distributors as the Manila Electric Co. (Meralco) and other DUs, because most of the taxes are passed-through expenses, meaning they are passed on to consumers.

Some lawyers and tax specialists even say that the 12-percent VAT on power should be scrapped altogether, because it is a case of double taxation. The corporate income upon which VAT is based is already taxed as income.

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INDIGENOUS FUEL: On the other hand, SB 3148 aims to bring down government royalties from indigenous energy sources from 60 percent to 3 percent of net proceeds of generation companies.

The idea behind the tapping into our very own, natural, or the so-called indigenous, energy sources is to have an alternative to imported fuel. But, as it is, the senator says, indigenous energy resources end up being more expensive than imported fuel.

Enrile says that the 60-40-percent arrangement between the government and Gencos laid down by a presidential decree during the Marcos regime was based on a premise that native or indigenous fuel will be exported and not used for local consumption.

Since indigenous energy resources are now being used locally and not exported, there is no point in continuing to collect royalties under what the senator calls “an anomalous taxation scheme.”

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PASS-ON SAVINGS: Lowering to 3 percent the 60-percent government share in Malampaya’s natural gas, for example, will result in cheaper natural gas for Gencos.

What will be saved by the generating firms can be used to remove and assume the cross-subsidy being shouldered by higher-income-bracket families, or those consuming more than 100 kwh per month.

If passed, Enrile says, his twin measures could lower electricity rates by at least P1 for residential users, and between P1.32 to P2 for industrial users.

For a household using a minimum of 100 kwh per month, savings could amount to at least P100. For lifeline users or those in the lowest economic strata, this could be a one-week allowance for one of the children or a one-week supply of rice.

For industrial power users, the savings could be the salary of one, two, or more workers.

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(First published in the Philippine STAR of June 16, 2009)

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