How the Philippines Can Cope With High Gas Prices


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As the price of gas continues to increase, bus and jeepney drivers and everybody else providing public transportation are pressing the government to allow the increase in the minimum fare. The pump prices of fuel increased by P11/liter over the past few months and with crude oil being projected to go up to $150/barrel by the 3rd quarter of 2008, it is but rational to expect more increases in the retail price of LPG and automotive fuel.

Based on the pronouncement of both the Philippine government and the transport organizations, it was evident that they are hesitant to push through with increases because of its inflationary effects and burden to the consumers. However, with the fuel price hikes being seemingly unstoppable at this point, they are left with little recourse. Today, the government is seriously considering subsidies to alleviate the livelihood of people in the transport sector. Among the grants being considered is a P2/liter fuel subsidy, suspension of taxes on spare parts for public utility vehicles and the conversion of jeepney diesel tanks to liquefied petroleum gas. This is in addition to the onetime electric cash subsidies for poor families and the heavily subsidized rice sold by the government stores.

Analyzing things a bit, the government should do away with the practice of giving cash and other forms of subsidy. Subsidies cost a lot of money and of course, it will have to be drawn from somewhere. As the Philippine population continuous to increase, the consumption of food and non-food commodities also increases. The government will therefore have to keep on increasing taxes and introduce new ones to be able to have a fund all these subsidies. In short, subsidies are non-sustainable. In addition, let us not forget that subsidies present another avenue for corruption.

The best thing for the government to do is decrease the general tax rates, totally eliminate certain taxes and implement programs that will result in the decrease of the country's dependence on imported fuel. The elimination of taxes on vital commodities directly benefits consumers unlike subsidies wherein, money can get lost along the way. The conversion of all jeepneys, buses and taxicabs from being gas-guzzlers to LPG and battery powered vehicles are both doable and economical. It also results to a cleaner environment.

In addition, Metro Manila authorities should also step up its campaign against abusive drivers of public utility vehicles. The bus and jeepney drivers that use the middle of the roads to load/unload passengers causes slow vehicular traffic, increased travel time and more fuel consumption for millions of vehicles. It also results to lesser productivity for most of the country's riding public. If that is not enough, all the abusive taxi drivers who cheat their passengers should also be taken out without mercy. All cab drivers in other parts of the country are honest. It is only in Metro Manila where the worst kind thrives.

All the abusive drivers should be taken out of the streets. Metro Manila, as it is now, has plenty of unemployed people that are capable of driving responsibly. Without batting an eyelash, any businessperson can have a hundred of qualified applicants for every abusive driver that had his license revoked by the government.

In the streets of Metro Manila, let the immortal words of Malthus reign. Those who fail to adopt should be culled. Let survival be dictated by natural selection based on the rule of law and the general will.

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