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We demand urgent economic relief, now!

One oft-repeated line by GMA’s propaganda machinery is that we should all “stop the political bickering” and unite behind her presidency, so that the government and public could focus on coping with the worsening economic crisis and mass poverty.

Okay, let us grant her wish for once – at least for today, in this editorial space.

Actually, the people’s movement has long been pushing for three key demands by way of urgent economic relief, even as it went full-gear in echoing the widespread public demand for GMA to resign. Let us dwell on these three economic demands one by one.

First, impose a moratorium on oil price hikes and scrap RA 8479 (the Downstream Oil Industry Deregulation Act of 1998).

The oil companies’ constant propaganda line, echoed by government apologists, is that they can’t prevent oil price hikes because global oil prices are on the rise and the peso’s forex standing has steadily weakened.

However, independent think-thank IBON has recently shown that local oil companies led by the big three (Petron, Shell and Caltex) have been overpricing their products in the past years, taking advantage of the oil deregulation law (RA 8479) which allows automatic price hikes.

IBON reviewed actual pump price movements from 2000 to 2004, then compared it to price movements of benchmark Dubai crude and forex rates as suggested by the Dept. of Energy itself. IBON found that local oil products have been overpriced by a total of P3.68 per liter for that same period. In the more recent period January – August 2005 alone, overpricing by local oil companies was found to be as high as P2.15 per liter. (For more details of how IBON did its computations, please visit http://www.ibon.org.)

Because of such overpricing, local oil companies were able to accumulate P5.6 billion in extra profits from 2000 to 2004. This is on top of their regular profits, which reached P10.4 billion for Petron, Shell, and Caltex from 2000 to 2003 based on SEC figures. It is very clear that they can easily absorb the impact of reimposed oil price controls.

We therefore join the broad array of people’s organizations in demanding for state intervention in the pricing of local oil products. Immediately, the government can decide to suspend (if not scrap) the oil deregulation law and at least reimpose regulatory measures (if not an outright moratorium) on oil price hikes.

Second, work for immediate debt relief instead of implementing the expanded VAT scheme, to ease the fiscal crisis.

As IBON pointed out: Malacañang claims that the country is losing an estimated P130 million in revenues for each day that the EVAT implementation is delayed. Yet government is spending as much as 14 times this amount just to service its debts.

Secretary Romulo Neri recently said that 70% of the proposed P1 trillion budget for 2006, or around P700 billion, would go to debt servicing. If the government achieves some form of debt relief that frees us from even one-half of our annual debt service obligations, it would bring savings a lot bigger compared to P83.9 billion, which is the projected revenues from EVAT for 2006.

Automatic debt servicing ties the government’s hands in managing its limited resources and determining the right priorities especially in health, education, and other basic social services as its poverty-stricken people demand.

We therefore join the broad array of people’s organizations in demanding that automatic debt servicing be scrapped. The government should immediately peg payments for interest and principal at a minimum level of its annual expenditures, after allocations for important social and economic services have been made, instead of implementing the oppressive EVAT.

Third, freeze prices of basic commodities and work for an increase in minimum wage levels.

As we push for the first two urgent economic relief measures, we also join the people’s relentless demand for the government to impose price controls of basic commodities to ease the worsening daily burden of ordinary consumers. Aside from our demand for the reimposition of oil price controls, there should also be a moratorium on water and power rate increases.

According to IBON data, as of June 2005, the price of NFA rice in the NCR has risen 8% compared to June 2000 levels; pan de sal has risen 29%; Lucky Me noodles, 32%; eggs, 16%; galunggong, 19%; tomatoes, 33%; and bananas, 22 percent. Napocor’s monthly effective rate in the Luzon grid for June 2005 reached P4.41 per kwh, almost 70% higher than the P2.60 per kwh rate for the same period last year.

Price controls of food products should be backed by price supports and government subsidies, to protect the livelihoods of the country’s food producers. At the same time, the government should work for substantial increases in minimum wages to bring the standard of living of workers up to decent levels.

One last note: GMA herself has admitted that coping with the economic crisis, especially the oil price crisis, is now a matter of national survival. The question now is, is her regime really interested in implementing such urgent measures for economic relief, for national survival?

Or is she just dangling bits and pieces, such as the recent idea of suspending the EVAT scheme’s implementation, to help her own political survival?

GMA might have survived recent “tipping-point” events that brought her regime to the brink of collapse in June and July. She might even evade official accountability by putting a monkey-wrench on the impeachment process. But this so-called “economic expert’s” inaction or mishandling of the relentless economic crisis will sooner or later put the social cauldron to a boiling explosion.

If the GMA regime refuses to implement these minimum demands for urgent economic relief, then the people have no choice but to work for an alternative government that is able and willing to do so. Time is running short, not only for GMA and her dying regime, but for the entire rotten economic system.#

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