Gatchalian wants third tranche of ‘ayuda’ for PUV drivers

Senator Sherwin Gatchalian on Thursday said he would push for additional cash subsidies for public utility vehicle (PUV) drivers as local pump prices of oil is expected to continue rising as the Russian invasion of Ukraine drags on.

With the global disruption on oil supply and distribution, Gatchalian said it is necessary to provide additional cash assistance to PUV drivers considering that the latest round of fuel price increases has brought petroleum rates up especially in provincial markets.

“I'm a supporter of targeted subsidies. This is more efficient, but we have to make sure that it's dispensed and given in a timely manner. And there's this big problem with giving subsidies in a timely manner in our case...So in short, I am in favor of increasing the subsidies, maybe 50 percent more to about 100 percent more, so that we will cover the increase in fuel prices in the last few days,” Gatchalian said in an interview on CNN Philippines.

“Yes, I am (In favor of a third tranche). I'm looking at that. It's more economical. One tranche will cost you about P4-billion to about P6-billion, as opposed to removing excise tax that will cost us roughly around P200-billion, so it's still more economical to give fuel subsidies provided it's given immediately,” he said.

“I know that the first and the second tranche encountered a lot of delays. And the delays are penalizing our drivers because their margins or their earnings are getting squeezed on a daily basis. So we have to give it to them immediately and use technology such as E-wallets to give it to them,” the senator further said.

But Gatchalian acknowledge that the third tranche of cash assistance may not be enough and could only cover drivers needs for eight days.

“This is actually one of my biggest concerns, the uncertainty that is surrounding this fuel issue. It seems to me that there is no insight regarding the Ukraine-Russian incident or the Ukraine invasion,” he said.

“Everyone was predicting that hopefully in two months everything will be back to normal but it seems to me that's not going to happen. And what's actually happening right now, is uncertain. Because of that uncertainty, fuel prices are again not going up, passing $120 per barrel,” the lawmaker pointed out.

Because of this, Gatchalian said he is planning to conduct a hearing next Tuesday to gauge what the government could do in case the Ukraine-Russia crisis would last in the next six to 12 months.

“We have to be ready because we have to make sure that we have enough budget to give subsidies and what will be the super ultimate solution to help our constituents,” he stressed.

But should the crisis extend to six months, Gatchalian said he is open to supporting suspending the imposition of excise tax and value added tax (VAT).

“Correct. I'm looking to suspend excise tax, possibly VAT if necessary. But I think excise tax is easier to administer than VAT. But on a matter of principle I'm looking, I'm also open to looking at that if the situation gets prolonged,” he said.

Gatchalian explained a prolonged scenario on the Ukraine crisis and the possible scenario when the sanctions hit could make it difficult for the Philippines to find sources of fuel.

“Because when the sanctions hit obviously the other countries will probably source their fuel from where we source it. So we will ease out and prices will shoot up again,” he pointed out.

Though he is against it as a matter of principle as removing excise tax would only be advantageous to those who owns cars and the AB section of society, Gatchalian said he is willing to support it as it would be a “last resort.”

“And I say that because this crisis is again being pushed to uncertainty. Typically, even if you look at the TRAIN (Tax Reform for Acceleration and Inclusion) law, it's supposed to be a short term solution of three months, in fact, but this crisis is pushing six months already and a lot of the analysts are saying that it might even push to about a year, to a year and a half. So we have to prepare for the worst, if ever, this would become a prolonged crisis,” he warned.