DIESEL ROLLED BACK P1.50

Responding to President Gloria Macapagal-Arroyo's appeal, oil firms in the country, led by industry leader and partly government-owned Petron Corp., cut the price of diesel by P1.50 a liter effective at 12:01 a.m. Monday.

The rollback came less than 48 hours after the oil firms raised the price of diesel by P3 a liter, fueling the ire of public transport groups that threatened to go on a massive strike. It was the single biggest increase to date in the price of diesel, which is used by public buses and jeepneys, and the 22nd adjustment since January for a total of P24.

At a rare Sunday news conference, Press Secretary Jesus Dureza announced the cut in the price of diesel, particularly by Petron and Pilipinas Shell Petroleum Corp.

Dureza said Ms Arroyo had instructed Executive Secretary Eduardo Ermita, "in coordination with Energy Secretary Angelo Reyes," to appeal to these two main players in the oil industry for a rollback in the diesel price.

"And we are happy to announce that there was a positive response from the oil companies," Dureza told reporters.

"By midnight Sunday, which will effectively be Monday, a rollback of P1.50 for diesel fuel will be made effective."

It was the third cut in the price of diesel since February but prices have increased 19 times this year. Diesel will now cost between P55.98 and P57.97 a liter.

Both the oil firms and transport groups were unhappy with the price cut for different reasons.

Disappointing
Malacañang's "appeal" for oil firms to reduce the price of diesel came as a surprise to oil firms, especially as they were still trying to recover losses from high international crude prices.

"It's definitely very disappointing. We thought we'd only have to recover P2-P3 a liter for diesel, based on June costs. Now we'd have to recover P1.50 more because of the rollback," said an industry executive, who requested anonymity for fear of incurring the wrath of Malacañang.

Based on July costs, the industry would still need to recover another P2.50, on top of the June underrecoveries, the executive said.

"So that's P6-P7 for August--exactly the amount that a value-added tax (VAT) rollback would shave off from the pump prices of diesel," the source added.

Despite the "disappointment," the executive said oil firms could not do anything but submit to the appeal because it was Ms Arroyo herself talking.

"It's Ma'am's order, so we have no choice but to comply," the source said.

Farce
Instead of welcoming the rollback, a militant group called the price reduction a "farce" and an attempt on the part of Ms Arroyo to assuage public outrage.

"It is a calculated political move aimed at defusing public outrage over the nonstop oil price increases and the value-added tax on oil," Bagong Alyansang Makabayan secretary general Renato Reyes Jr. said in a statement.

Reyes said it was not a real rollback because oil companies were merely deferring the collection of their so-called under-recoveries.

"The P1.50 rollback will be recouped by the oil companies in a matter of days, or during their next increase, which is likely five days from now," he said.

The Pagkakaisa ng mga Samahan ng Tsuper at Opereytor Nationwide (Piston) said the rollback was not enough to offset the huge jump in diesel pump prices this year alone.

State of the nation
In a statement, Piston secretary general George San Mateo said Ms Arroyo made the appeal not because she truly cared for the people, but because she wanted to arrest her falling popularity rating.

Reyes said the appeal of Ms Arroyo for a price cut was all for show, in preparation for her State of the Nation Address next week.

"Malacañang will, of course, take credit for the so-called rollback since it desperately wants to score brownie points just before Arroyo delivers her Sona. Ms Arroyo is reeling from plummeting approval ratings due to her regime's inability to control oil prices and lift the VAT on oil," he said.

Dureza said the President's appeal had nothing to do with the latest Social Weather Stations survey that showed Ms Arroyo had become the most unpopular leader in the country since 1986.

"The President, irrespective of whether she's popular or unpopular, will do what is right for the nation," the press secretary said.

In a phone interview, Ermita said that just like everyone, Ms Arroyo was taken aback by the "big leap" in diesel price, prompting her to instruct him to appeal to the oil firms for a price cut.

Ermita said he called up Petron president Nick Alcantara, who was abroad, and then later met with Petron spokesperson Vivian Ruivivar on Saturday. He also spoke to Pilipinas Shell president Edgar Chua.

"We suggested whether they could roll back the price by P1.50 because the P3 increase was really hefty," he said.

Recover losses later
Ermita said he told Shell and Petron officials that maybe they could "find a way later on to recover" their losses due to soaring oil prices worldwide.

He said the two oil firms were "very accommodating" to Ms Arroyo's request and that an elated President told him to thank them.

"It's an appeal from the President. So how can we turn it down considering her concerns on the impact of the rather hefty increase, which was necessary," Ruivivar told reporters by phone at Dureza's news conference in Malacañang.

Asked whether it was only Ms Arroyo's simple appeal that made Petron agree to a rollback, Ruivivar said: "It's a question of moderating the adjustment so in time we will find how...actually to fully recover our cost because we cannot operate at a loss."

Dureza thanked the oil companies for heeding the President's appeal, saying this would "go a long way in cushioning the impact of oil prices on the masses, especially those using diesel fuel."

TROPICAL STORM "HELEN" ON ITS WAY TO SOUTHERN JAPAN

Tropical storm "Helen" has accelerated further and is now moving towards the southern islands of Japan, the weather bureau, Philippine Atmospheric, Geophysical and Astronomical Services or PAGASA, said in its 11 p.m. bulletin Wednesday.

"Helen", with maximum sustained winds of 95 kilometers per hour near the center and gustiness of up to 120 kph, was spotted 120 km east northeast of Basco, Batanes, as of 10 p.m. Wednesday.

The storm is currently moving north northeast at 19 kph, and is forecast to be 500 km north northeast of Basco or 330 km southwest of Okinawa, Japan, by Thursday evening.

Public storm warning signal number 2 is currently raised over Batanes and the Calayan Group of Islands, while public storm warning signal number 1 is in effect over Cagayan, Apayao, and Ilocos Norte. Storm warning signals elsewhere have been lowered by the country’s weather agency.

The storm will still continue to enhance the southwest monsoon and will bring rain over the rest of Luzon and Visayas.

Residents in low lying areas and near mountain slopes are advised to take all the necessary precautions against possible flashfloods and landslides.

Residents along the coastal areas under Public Storm Signal Number 2 are alerted against big waves and storm surges generated by this tropical cyclone.

"The public and the disaster coordinating councils concerned are advised to take appropriate actions and watch for the next bulletin to be issued at 5 AM tomorrow (Thursday morning)," the bulletin added.

RCBC ROB-SLAY SUSPECT GETS CHR PROTECTION

MANILA, Philippines -- Saying he was under constant threat from those who killed his father, a suspect in the robbery-massacre at the Rizal Commercial Bank Corp. (RCBC) branch in Cabuyao, Laguna, has sought the protection of the Commission on Human Rights (CHR).

Jake Javier, 23, was placed under the protective custody of the CHR Tuesday, shortly after he was picked up in Sta. Maria, Bulacan, by the commission’s lawyers, his family and former Batangas Vice Governor Ricky Recto.

“I don’t trust the police anymore, especially after what they did to my father,” said Javier in Filipino.

Javier’s father, Vivencio, was killed by intelligence agents of the Batangas police who raided their house in the village of Pagaspas, Tanauan City, at midnight on May 22.

The police claimed father and son were members of the Lucido-Javier robbery gang who staged the heist and killed the 10 persons who were in the bank at the time.

Vivencio was one of four alleged suspects who were killed in three separate police operations in Batangas and Laguna one week after the robbery.

Provisional custody

CHR Chair Leila de Lima said the commission placed Javier under its custody after she consulted the two other CHR commissioners.

De Lima said Javier’s stay at the CHR was provisional.

“This is just a temporary physical custody. If a valid order from any court, like a warrant of arrest, is issued we will turn him over,” she said at a press briefing in Quezon City.

Javier, his mother and his lawyer later signed an agreement with De Lima regarding the conditions of his stay at the CHR.

Recto said he advised Javier’s family to go to the CHR the day after he learned of Vivencio’s killing and the threats to the family.

He said Vivencio, a former village captain, was one of his political supporters in Tanauan.

Made up story

Reached on his mobile phone, Senior Supt. Aaron Fidel, head of Task Force RCBC, said the police respected the CHR decision to place Javier under its custody.

“He (Javier) can stay at the CHR as long as he wants,” he said.

Asked about the threats on Javier, he said the suspect was only “making up a story to cover up” his complicity in the case.

“We’re not behind any attempts to kill him. In fact, we want him alive so he can talk about what happened in that robbery-massacre,” Fidel said.

Fidel said Javier was one of six persons the police have charged with robbery with multiple homicide in connection with the bloody bank job.

He said one of the witnesses saw Javier enter the bank on the day of the incident.

He also lashed out at De Lima for “prejudging” the police team that shot and killed the elder Javier.

In an interview with the Philippine Daily Inquirer, Jake Javier said he was asleep at home when the robbery occurred on May 16.

He said he only learned about the incident when he saw it on television at noon that day.

ADDRESSING THREATS TO DEMOCRACY

This year, the dramatic increase in food prices sent shock waves of alarm, trepidation and uncertainty all over the world. Depicted as the silent tsunami, the global food crisis spurred riots in 34 countries and threatens the political stability of import-dependent countries and democratically fragile states as well as Bangladesh, Afghanistan and countries in Western and Southern Africa which are experiencing severe weather conditions.

The soaring oil prices, population growth, cultivation of biofuels, loss of agricultural land to industrial development and climate change contributed to the global food crisis.

Climate change has no respect for territorial boundaries or for a country’s wealth or economic standing. Failure to address climate change will result in an intense conflict over resources in the near future.

On the other hand, increasing poverty and inequality breed conflict, social unrest, insurgency and sow the seeds of terrorism. Moreover, the food crisis, competition over resources, climate change and increasing poverty will certainly fuel massive unrest especially in less democratic parts of the world.

To find a lasting solution we need to get our act together and think beyond our borders and national identities. We must remember that the issues and concerns that we face in the economic, social and political fronts are best understood and addressed in a democratic setting.

In Asia, voices calling for change and for more democratic space are being violently stifled. In Myanmar, Cambodia, and Tibet, the struggle for genuine democracy spans decades.

Months ago, we were horrified when we saw on television how ordinary folks and monks were beaten like animals by the police on the streets of Rangoon. There was neither shame nor remorse on the part of the government of Myanmar even if these acts were widely condemned.

The cyclone that recently struck Myanmar and claimed thousands of lives left a dent in our hearts. But even as we shared their grief, we were also disgusted when we heard terrible stories of how victims were denied much needed aid from foreign governments by the ruling junta.

Even in prosperous Asian countries, under the guise of protecting state security, the political opposition and the innocent citizens are being persecuted, harassed, jailed without charges and denied the right to avail of the services of a lawyer or the right to fair trial.

Dismantle barriers in agriculture

Democracy anywhere in the world remains fragile if somewhere in the world it is being disregarded, trampled, even abhorred.

Unless there is economic stability, peace and security in this century will remain elusive. International terrorism thrives where poverty, inequality, lack of political choices and social opportunities abound. It is no secret that extreme poverty has warm relations with terrorism.

We must collectively call for a meaningful change in the global trade arena. We can avert a global economic disaster if wealthy countries will be as aggressive and passionate in dismantling barriers in agriculture as they are in dismantling barriers in industrial goods and services where they have a comparative advantage.

Rich nations can do much by opening up their markets and scrapping subsidies so that poor nations will have a fair chance to succeed in the trade arena and consequently be less dependent on aid.

It is outrageous that the daily allowance on subsidy for every cow in the European Union is around 3 dollars which is more than what 2 billion poor people earn in a day hence they are experiencing food insecurity.

Expansion and effective distribution of global wealth is only possible if trade-distorting farm subsidies and tariffs are removed.

Improve governance

The gigantic challenge we are facing right now is to address these global problems by improving governance. It is no secret that resources for economic and social development have been diverted to the personal pockets of the powerful elite especially in fragile states.

Corruption has corrosive effects on societies and nations. It impedes development. But the fight against corruption is only effective in a democratic setting because accountability is required of public officials and institutions. In a genuine democracy, we have a strong and independent judiciary and a resolute and vigilant media. It is only in a genuine democracy where people’s rights and welfare are given huge consideration.

In the economic arena, we are in a unique position because we can impress on our governments and people the importance of human lives over trade policies that only benefit a few spoiled farmers in Europe. Much has been said against the European Union’s Common Agricultural Policy. However, change for the benefit of humanity will take effect if trade reforms will be seriously and sincerely undertaken by the European Union.

The threats to global security are also threats to democracy. It is regrettable that the measures adopted by states to counter terrorism also infringe on human rights and civil liberties. Fighting terrorism at the expense of human rights is a formula that will surely fail.

We must constantly and consistently guard against the erosion of democracy and disrespect of democratic institutions even in places beyond our borders.

2 MORE BODIES OF "PRINCESS" VICTIMS RECOVERED IN CAMARINES SUR TOWN

MANILA, Philippines - Two more bodies believed to be fatalities from the capsized MV Princess of the Stars were recovered in Camarines Sur province over the weekend, radio dzRH reported Monday morning.

The report said fishermen in Bahao village in Libmanan town in Camarines Sur found two male bodies still wearing life vests, possibly from the capsized vessel.

However, authorities could not identify the bodies as they were already in an advanced state of decomposition. The fishermen immediately buried the bodies.

Meanwhile, the Coast Guard reminded Sulpicio Lines Inc., owner of the capsized vessel, of its Monday "deadline" to finish talks with a private firm to salvage the ship.

Coast Guard commandant Vice Admiral Wilfredo Tamayo said it is Sulpicio's responsibility to remove the bunker fuel and endosulfan inside the capsized vessel soonest.

The discovery of endosulfan aboard the capsized ship had triggered a fishing ban that has affected San Fernando town in Sibuyan Island, Tamayo said.

He added the removal should take place before waves caused by the monsoon rock or move the capsized vessel, or another cyclone passes through the area.

In the meantime, Tamayo said Coast Guard environmental protection teams are already in place in nearby Sibuyan Island to protect residents from potential environmental problems.

2 SECURITY GUARDS WOUNDED IN ROBBERY

MANILA, Philippines - At least two security guards were wounded while an estimated P3 million was lost in an armored-van robbery at the Market!Market! in Taguig City Friday morning.

Radio dzBB's Denver Trinidad reported that tension disrupted daily activities at the area after the robbers engaged security guards in a five-minute shootout.

Initial testimonies taken by police indicated the robbers may have taken P3 million in the robbery, while shells recovered from the scene indicated Armalite weapons were used.

Police are also trying to look for the armored van (body number 0250), which "disappeared" during the commotion.

One of the wounded guards, Rene Boy Pader of Audacious Security Agency hired by Chinabank, sustained gunshot wounds in the chest and was rushed to the Ospital ng Makati.

A second guard, Samuel Cacho, 39, was reported in critical condition after sustaining gunshot wounds in the back.

On the other hand, a witness told dzBB radio that the Pajero was parked in the area and started to move once the armored van arrived, indicating its passengers were aware of the van's schedule.

Police sealed off the establishment and set up checkpoints in a bid to intercept the robbers. The report said there was blood at the Market!Market! lobby.

Sketchy details of the incident showed the suspects arrived in a silver Pajero-type sport utility vehicle and pulled up alongside the parked armored van, then fired at the van.

After a firefight that lasted five minutes, the Pajero backed up and sped away.

CARRYING THE BURDENS OF OIL PRICE HIKE!!!

The public had its taste of a transport strike last December 13 after almost two years. PISTON (Pinagkaisang Samahan ng mga Tsuper at Operator Nationwide or Unity of Associations of Drivers and Operators Nationwide) said the strike was successful: paralyzing almost 90-95 percent of public transport nationwide and around 70 percent in the National Capital Region. The government and the Philippine National Police claimed that the strike was hardly felt, affecting a mere 20 percent of public transport. A major daily’s headline declared that the transport strike fizzled out. But what was seemingly lost in these claims and counter-claims is the core of the issue - the spike in oil prices - and the justness of the demands of PISTON.

Undeniably, the prices of oil products has increased so many times this year and the public should expect more rounds of oil price hikes during the early part of next year. What was only assured by the government is that the prices of oil products would no longer increase for the remainder of the year, a mere two weeks.

In the meantime, drivers of public utility vehicles and of course, the public, are made to bear the increases in oil prices. Every centavo increase in fuel translates into a decrease in the income of drivers. Owners of jeepneys and taxis and buses will have their boundary (tariffs paid by the driver) intact. Bus companies have a percentage sharing in collected fares with the driver and conductor thus, the burden in the increase of fuel costs is shared by both drivers, conductors, and owners.

For example, because of the P6.50 ($0.157 at an exchange rate of $1=P41.14) per liter total increase in diesel - which was priced at P31.45 ($0.76) at the start of 2007 and has reached P37.95 ($0.92) per liter - a jeepney driver, who regularly consumes 30 liters per day, has lost P195 ($4.739) in his/her daily income. The average income of a jeepney driver now has decreased to P211.50 ($5.14) per day from P406.50 ($9.88) at the start of 2007. (Please refer to the related article for the details of the computation.)

Likewise, oil price spikes pushes the prices of basic commodities up as corporations pass on the burden of increases in transport costs and operating expenses on consumers. So the poor driver carries the burden twice over in the form of decreased income and increased cost of living.

Most transport groups, with the exception of PISTON, have been calling for an increase in transport fare to help them cover the increase in fuel costs. But that would only translate into passing on the burden of oil price spikes from the driver to the commuting public. The problem is that the salaries and wages of the commuting public do not increase correspondingly and prices of basic commodities, services, and utilities have likewise been increasing.

Who then should carry the burden of oil price spikes?

PISTON articulated three interesting demands: the Oil Deregulation Law be scrapped; that the government should control the increases in oil prices; the 12 percent expanded value added tax on oil products be removed.
The scrapping of the Oil Deregulation Law would allow the government to control the prices of oil. With the Oil Deregulation law in effect, all the government could do is to either beg the giant oil companies to temper their increases or issue empty threats of filing cases against the latter for price fixing.

As I have discussed in two previous articles, two giants are to blame for the oil price spikes. First are the giant oil companies dominated by the big three: ExxonMobil, Royal Dutch Shell, and BP. They are closely followed by TotalFinaElf, the fourth biggest oil company, Chevron Texaco, the fifth, ConocoPhilips, the sixth largest and ENI, the seventh. These giant oil companies are vertically integrated, meaning they control both their upstream and downstream processes all over the world: from the exploration to the drilling and refining operations up to your friendly service station. Thus, they are in a position to fix the price of oil and oil products regardless of supply and demand. And only a fool would think that they are not conniving and operating as a cartel.

Gone are the days when the Organization of Petroleum Exporting Countries (OPEC) are able to control the price of oil such as what happened in the early 1970s when it was primarily responsible for the increase of the price from $7 to $11 per barrel. Petroleum exporting countries, with the exception of Venezuela and Saudi Arabia which have nationalized their oil industries, are now hostage to these giant oil companies. Have you noticed that while OPEC decided not to increase its output, the price of oil still fluctuated independently? In fact, it even went down, when the law of supply and demand dictates that it should have gone up, right after OPEC made the announcement. And OPEC has repeatedly declared that there is no need to increase their output as the increases in oil prices is not due to supply and demand but because of speculation.

As of today, the price per barrel of light, sweet crude at the New York Mercantile Exchange (NYMEX) is at $92.35 per barrel. North Sea Brent crude at the ICE Futures is at $92.50 per barrel. The price per barrel has reached a high of $99 during the last few months. This brings us to the next point.

The NYMEX and the ICE Futures are not actually oil distribution channels. It is the giant oil companies themselves who market and distribute the oil. These are commodity futures markets.

Ideally, the purpose of commodity futures market is to enable companies to plan their operations and finances, and protect it against probable losses caused by price fluctuations of the commodities it needs for its operations.

What is being traded at the NYMEX and the ICE Futures are commodities, in this case oil, which are for delivery months ahead. And it is the financial ‘investors’ also called hedge fund managers, speculators, or financial oligarchs, who dominate trade in commodity futures markets as well as stock and money markets.

Whenever trading pushes the price of oil for future delivery higher, the tendency is to push up the price of oil now as speculators scramble to purchase current stocks in anticipation of earning profits from it in the coming months. Economists call this ‘investing’. But this is not investing in the real sense of the word as there is no actual value added resulting from the ‘investment’, just plain and simple profiteering.

Another reason for increases in the price of oil traded in these commodity futures markets is the anticipation of shortages in supply because of an anticipated higher demand or probable disruptions in production. This has been one of the reasons being cited often for the increases such as when they announce the effects of tensions arising in Iran or Nigeria or a hurricane in Texas. The reasons they cite are numerous and they can continue doing so for as long as they, the financial ‘investors’ ,want to profit from the futures market. While in actuality, none of the reasons being cited has ever caused a real shortage in supply. They are making mountains out of molehills so they can profit from it.

Oil prices also increase whenever the value of the dollar plunges or stock markets falter. Because every time that happens, speculators transfer their money to ‘invest’ in oil, which is considered a safe investment as it is always in demand.

The greed for profits of these two giants - the giant oil companies and the financial ‘investors’ - are insatiable and they would keep pushing the prices of oil up to earn superprofits. The only thing they fear is what is called by economists as “overheating’, meaning the price of oil has gone too high that actual demand for it falls as people cut down on consumption because they can no longer afford it. When the market “overheats,” the speculator who last bought oil at a high price before prices went down loses money. This is the reason why the price of oil has not yet breached the $100 per barrel level.

Thus, in order to protect the public from the profiteering tendencies of these two giants, there is a need for the government to carefully scrutinize the justification for the increases and to set price ceilings. In a deregulated environment, giant oil companies and financial speculators profit at will while consumers and drivers carry the burden of the increases. With a regulated environment, the profiteering tendencies of these giants can be tempered. A few pesos lost by the lowly driver, wage earner, and salaried employee whenever oil prices increase is a matter of life and death while a few pesos of profits taken away from giant oil companies and speculators is a mere pittance for them.

Furthermore, the Arroyo government should stop adding to the burden of drivers and consumers by scrapping the 12 percent expanded value added tax imposed on oil products.

There are long-term solutions to protect the Filipino people from the profiteering tendencies of these two giants such as the nationalization of the oil industry and searching for alternative sources of energy. But there is an urgent need for the Arroyo government to act now to mitigate the sufferings caused by the oil price spikes on the Filipino people. Otherwise it would be clear that the Arroyo government favors these giant oil companies and financial speculators to the detriment and burden of the Filipino people.