Bayan to gov’t: Price controls are imperative
News Release
April 7, 2008

Amid escalating prices of oil, rice, flour and other basic commodities, the umbrella group Bagong Alyansang Makabayan today asked the government to employ price controls and measures such as the suspension or removal of VAT on oil and power, to provide immediate economic relief for poor consumers.

Last weekend, oil prices again rose by 50 centavos per liter while government expects food prices to remain high due to internal and external factors.

“The consumers should not be left at the mercy of the free market. There should at least be some protection from skyrocketing prices during these times of crisis. That is government’s role, to protect consumers,” said Bayan secretary general Renato M. Reyes, Jr.

“Government should stop acting as if it’s helpless in the face of the crisis. Consumers are growing restless over the successive economic black eyes that they have faced the past month,” Reyes added.

Bayan is demanding controls in the prices of oil by the scrapping of the oil deregulation law and the removal of the Value Added Tax on petroleum products. It has also pushed for controls in the prices of rice and for the National Food Authority to expand its procurement of domestic rice instead of importation.

Bayan in the past has asserted that oil and rice, two very vital commodities in the Philippines, are “cartelized.” The oil industry is being run and dominated by the so-called “big three” oil companies of Shell, Caltex and Petron. Meanwhile, it is widely believed that a “rice cartel” also exists in the Philippines and is responsible for setting high commercial rice prices.

“It’s not surprising that multilateral agencies such as the International Monetary Fund and World Bank are staunchly opposed to price controls and government subsidies for consumers. They want a deregulated environment wherein big business can maximize their profits,” Reyes said.

“So far, all government efforts now have evaded the crucial question of high prices. Both the Energy Summit and the Food Summit put forward measures that have no direct impact on lowering the prices of oil and rice. It’s as if price controls were taboo nowadays,” Reyes added.