TRAIN taxes throwing fisherfolks into ‘debt trap’ » Manila Bulletin Business

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TRAIN taxes throwing fisherfolks into ‘debt trap’

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By Myrna M. Velasco

As various business segments feel like they are being spun in a whirlpool because of consumer-cost cataclysm out of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the country’s fisher folks are adding to the voice of dissent on fears that high fuel excise taxes could throw them into a debt trap.

The fisher folks reportedly raised their concern with the oil companies that are undertaking information, education and communication (IEC) campaign on the cost impacts of the TRAIN Law.

One of the leading oil firms of the country indicated that the fishermen are among those “most worried getting into a debt trap, because from P500 cost per trip that they had before, that will now go up to R600, an increase of about 20-percent per trip in their costs.”

The fisher folks would be among the worst hit marginalized sector, since aside from having hand-to-mouth existence on their source of livelihood, they are still being slapped with relatively irrational costs courtesy of the TRAIN Law – on their subsistence that is heavily dependent on fuel.

When fuel prices reached unprecedented spikes in previous yeas, it was the fishing sector that had been prioritized then with subsidies or price freeze by the Aquino regime. It is a reverse case now under this administration.

Energy Secretary Alfonso G. Cusi said subsidy or cost mitigating measures to fisher folks on their fuel usage are being mulled, but this is now under the discretion and policy direction of the Department of Finance (DOF).

In a related development, Senator Sherwin T. Gatchalian, chairman of the Senate Committee on Energy has reinforced call on the Department of Energy (DOE) “to closely monitor the rate increases in electricity and oil across the country as a result of the implementation of the TRAIN.”

He similarly asked the energy department to intensely keep an eye on the level of inventories of the coal-fired power plants. “We want to ensure that the increase in the generation charge brought about by the increase in the coal excise tax will only be applied to new coal stocks,” the lawmaker said.

Relative to this, he noted that “the DOE should also tighten its watch over the existing inventory of coal-fired power plants to ensure fuel pass-on charges in the generation charge of these plants should still be at R10 per metric ton excise tax for coal.”

Power utility giant Manila Electric Company (Meralco), which is sourcing one-third of its supply portfolio from coal plants, indicated that its contracted generators generally have buffer supply of coal for roughly three months, hence, the anticipated kick of the higher coal excise taxes in the electric bills will be on the summer months.

Aside from fuel prices at the pumps and coal excise taxes’ impact on power generation, the other components in energy bills that will go up due to TRAIN will be those on universal charge for missionary electrification (UCME) because of the excise taxes on diesel and bunker-C fuel used in electricity generation for off-grid areas; the re-imposition of value added tax in the wheeling charge of the National Grid Corporation of the Philippines and the removal of exemption in the replacement fuel cost on Malampaya’s shutdown.

Meralco noted that the cost impact for the Small Power Utilities Group (SPUG) will be two-tiered: The cost of transporting the fuel to the islands; and the actual cost of the fuel used in power generation.

State-run National Power Corporation (NPC) will still need to apply for cost recoveries on the fuel cost adjustments with the Energy Regulatory Commission, hence, that will likely have a time lag when it comes to getting them reflected in the electric bills.

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