A congressman from a renewable energy (RE) hub in the Philippines has expressed high hopes for the House-passed KALINGA bill--a crisis response measure that stemmed from the fuel price crisis.

Camarines Sur 5th district Rep. Migz Villafuerte said that House Bill (HB) No. 9305, or the “Komprehensibong Alalay sa Livelihood, Inflation, Negosyo at Goods Assistance (KALINGA)” Program, was passed on third and final reading by a vote of 294-3-0 (yes-no-abstain) on June 3 before the Congress adjourned sine die.

Villafuerte highlighted that the measure mandates the imposition of a 15 percent windfall profit tax on covered oil entities whenever the President declares a national energy emergency.

The fuel price crisis--triggered by the United States (US) and Israel's attack on Iran in late February--highlighted just how helpless fossil fuel-dependent economies like the Philippine can become once world prices shoot up due to supply constraints.

Villafuerte is a former governor of Camarines Sur--an emerging as the renewable energy (RE) capital of the Philippines with a slew of multibillion-peso projects on offshore and onshore wind farms projected to generate a total of almost 8,000 megawatts (MW) of electricity. 

“The KALINGA bill aims to institutionalize the national response mechanisms for government to quickly help Filipinos, especially the most vulnerable ones, deal with surges in fuel and commodity prices that jack up the cost of living,” Villafuerte said.  

“It aims to establish a KALINGA program designed to fast-track and further broaden the government’s response mechanisms to the prolonged crisis, including the provision of social safety nets or interventions for the poor and other sectors highly vulnerable to the war-induced global energy squeeze and economic downturn,” he noted.

He said the bill empowers the President to hold off collection of value-added tax (VAT) and/or excise taxes on petroleum products for a limited period of not more than 60 days, and subject to reports to the Congress on foregone revenues, inflation impact, fuel price effects, cost-benefit analysis and possible market distortions resulting from the implementation of  KALINGA measures.

The bill was crafted and developed through a series of public hearings by the Legislative Energy Action and Development (LEAD) Committee, which was created upon the initiative of House Speaker Isabela 6th district Rep. Faustino "Bojie" Dy III.

Dy and Majority Leader Ilocos Norte 1st district Rep. Sandro Marcos served as the principal authors of HB No. 9305. Villafuerte was among the over 100 co-authors of the bill.

Under the bill, the President is authorized to declare a state of national energy emergency upon the recommendation of the proposed KALINGA National Response Council, in the event that Dubai crude oil prices reach or exceed $80 per barrel for 30 days, or domestic fuel costs rise by at least 30% within 30 days, he said.

A national emergency can also be declared if and when the national fuel inventory falls below a buffer stock level equivalent to a 30-day supply, said Villafuerte.

Once a national energy emergency is declared, the Chief Executive may exercise limited and time-bound emergency powers to implement such initiatives as  releasing, realigning or augmenting available funds for emergency relief programs, he added, subject to constitutional, budgetary, procurement and audit rules.

The targeted beneficiaries of the proposed KALINGA program are low-income and near-poor families, minimum wage earners, displaced and underemployed workers, informal workers, public utility vehicle (PUV) drivers and operators, delivery riders, logistics and freight service providers, commuters, farmers, fisherfolk, micro small and medium scale enterprises (MSMEs), overseas Filipino workers (OFWs) and their families.

Although the KALINGA program is intended for government to best deal with the current oil price surge and global economic downturn caused by the Middle East conflict, Villafuerte said this proposed crisis response framework is meant to be the default program for future emergencies after the current Iran war.  

Before the February air strikes by the US and Israel on Iran, global crude oil ranged from $70 to $99 a barrel, and domestic pump prices ranged from  P48 to P65 per liter for diesel and from P49 to P63 for gasoline.  

After peaking at $138 per barrel in April, crude oil prices subsequently eased and fell recently to $98 to $102 per barrel, and local pump prices have gone down to P69 to P99 per liter of diesel and from P71 to P99 for gasoline.