PH now under ‘state of national energy emergency’, PBBM declares

MANILA: President Ferdinand Marcos Jr. has declared the Philippines under “state of national energy emergency.”

The country’s chief executive signed Executive Order 110 citing that the ongoing conflict in the Middle East poses a threat to the country’s energy security.

The same order noted that the closure of the Strait of Hormuz disrupted the supply of fuel products to international markets, affecting the country as a net importer and is vulnerable to disruptions in global oil production and transportation.

The Malacañang said that EO 110 is pursuant to Section 25 of Republic Act 7638 (also known as the Department of Energy Act of 1992), which authorizes the President to declare a critically low energy supply or imminent danger thereof, and authorize the implementation of the fuel and energy allocation plan and other energy conservation measures.

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Further, EO 110 adopts the Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT) as the government’s coordinated, whole-of-government response framework to safeguard national interest.

A committee made up of the Executive Secretary and the Secretaries of the Department of Energy, Department of Transportation, Department of Social Welfare and Development, Department of Agriculture, Department of Finance, Department of Economy Planning and Development, as well as Department of Budget and Management — chaired by the President of the Philippines — will oversee the said program.

Under EO 110, the energy department is authorized to take appropriate measures to safeguard the stability and adequacy of the country’s energy supply, which will include implementation of fuel and energy optimization plans; adoption and enforcement of energy conservation measures; action against hoarding, profiteering, and supply manipulation; and direction of the Philippine National Oil Company (PNOC) and PNOC Exploration Corporation to assist in ensuring the stability and adequacy of the domestic fuel and energy supply.

These three agencies will be in charge of the procurement of required fuel and petroleum products and make advance payment of an amount exceeding 15 percent of the contract amount.

Concerned departments, agencies, offices, and instrumentalities are also directed to implement necessary response measures.

The transportation department will provide measures to soften the blow on the transport sector and the commuting public by way of fuel subsidy allocations, commuter fare subsidies, expansion, and review of appropriate measures to reduce transport costs such as the temporary reduction, suspension, or deferral of toll charges, among others.

Meanwhile, the government’s social welfare arm shall speed up the release of assistance and provide appropriate social welfare and livelihood support to affected sectors, such as transport workers, farmers, fisherfolk, displaced workers, repatriated Overseas Filipino Workers, and other vulnerable groups.

Moreover, local government units are also urged to create measures within their respective jurisdictions that support, facilitate, and complement the national policies and agency directives, and to allocate necessary resources, including funding and personnel, to mitigate the impact of the disruptions in the global fuel supply.

The declaration of a national energy emergency shall remain in effect for one year from issuance, unless extended or lifted by the President himself.

Relatedly, Marcos Jr. signed Republic Act 12316 that will give him the authority to reduce or suspend fuel excise taxes if Dubai crude oil price reaches or exceeds US$80 per barrel for one month.

“The power of the President to temporarily suspend or reduce the excise tax on petroleum products granted under this Section shall be exercised only until December 31, 2028,” the law stated.

With this, the executive branch needs to report to Congress the basis and goals for reducing or lifting excise taxes, including expected revenue losses, effects on households, impact on inflation and fuel prices, cost-benefit analysis, and any possible market distortions or unintended consequences.

“The report shall include a recommendation on whether the suspension or reduction of excise taxes should be maintained, modified, or lifted, and shall form part of the basis for any continued suspension or reduction,” the law noted.

For their part, companies will be required to submit to the energy department their monthly data on the cost components of the price of petroleum products sold.

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