SPONSORSHIP REMARKS OF
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Mr. Speaker:
With its
recent rulings, the
Supreme Court has all but interred
Republic Act No. 8180, which is most commonly referred to
as the Oil Deregulation Law.
But the
High Tribunal, in the
same breath, has in no uncertain terms permitted the law to be resurrected, of
course this time it should be minus what it considers the incurably diseased
parts, that is, the parts which led the court to ordain the burial of the
statute.
It its main decision, the
Supreme
Court made it clear that it does not disagree with deregulation as an
economic policy. (Decision dated November 5, 1997 in G.R.
Nos. 124360 & 127867, p. 38). And in the resolution denying
the motions for reconsideration, it reiterated that it “did not condemn the
economic policy of deregulation as unconstitutional.” (Resolution dated December 3, 1997, p. 21).
It is therefore my distinct privilege, Mr. Speaker, to author, not only to
sponsor which is what I did as regards the voided former law, the new oil
deregulation measure. The committee bill, House Bill No. 10363, which we
are now submitting to this Body for passage is a consolidation of House Bill
10270, authored by Honorable Hernando B. Perez; House Bill No. 10292, authored
by the Honorable Manuel Roxas II; House Bill No. 10302, by this Representation;
House Bill No. 10305, authored by Honorable Miguel Romero; House Bill No.
10309, authored by Honorable Marcial Punzalan, Jr.; and House Bill 10314,
authored by Honorable Leopoldo San Buenaventura.
In its resolution, the
Supreme Court
stressed that it is not its will “to return even temporarily to the regime of
regulation” for such a move, according to the
Supreme Court has “pernicious
consequences.” (Resolution dated Dec. 3, 1997,
p. 21). But it stressed too that, and I quote: “under our scheme of
government the remedy to prevent the revival of an unwarranted status quo
ante lies with Congress as only Congress can block the revival or the status
quo ante or stop its continuation by immediately enacting the necessary
remedial legislation. (Resolution dated Dec. 3, 1997,
p. 21).
Significantly, the
Supreme Court
has set the constitutional parameters along which Congress may fashion the new
Oil Deregulation Law. It even clarified that and I quote again: “There is
no impediment in enacting
Republic Act No. 8180 minus
the provisions which are anti-competition.” (Resolution
dated Dec. 3, 1997, p. 21). But we should do more than that.
There is need to fortify the antitrust safeguards, institutionalize the
mechanisms to redress antitrust violations and enhance the powers of the
Secretary of the Department of Energy to
gather information and to require reports for the purpose of curbing
anti-monopolistic behavior.
The present bill does away with the much-criticized provision on tariff
differential. Instead, it mandates uniformity in the tariff treatment of
imported crude oil and imported finished products. The specific tariff
duty rate may either be provided by Congress in the measure at hand, in which
case it may be fixed during the period of amendments at 3%, or it may be left
to the President of the
The present bill does not contain any provision on minimum inventory
requirement.
The approach of the bill concerning predatory pricing is different,
however. Although the
Supreme
Court scuttled the erstwhile provision on predatory pricing, the Committee
proposes that the new measure should prohibit predatory pricing, nevertheless.
Such a proscription is the hallmark of any well-meaning antitrust legislation.
The
Supreme Court, it will be
noted, struck down the predatory pricing language in
R. A.
8180 because, according to the
Court,
conceivably it could be used against new players and it was loosely
constructed. The predatory pricing provision in the present bill does not
suffer from any such infirmity. As a matter of fact, the
Supreme Court, in its resolution,
cited the objective of this Representation’s House Bill No. 10057 and the new
definition of predatory pricing proposed therein and even used the bill in
rejecting the government’s motion for reconsideration. (Resolution dated Dec. 3, 1997, p. 21). This
Representation filed House Bill No. 10057 before the promulgation of the
Supreme Court decision.
Justice Santiago Kapunan, who came out with a
separate
concurring and dissenting opinion implied that the amendment of the
predatory pricing provision along the lines suggested in the said bill which
are incorporated in the present bill, by the way, Mr. Speaker, will wipe out
the original defect.
The definition in the bill at hand was taken largely from the Areeda-Tuner Test in the
The
Supreme Court Resolution of December 3, 1997 is
quite explicit, Mr. Speaker, that the new oil deregulation law can do away with
the transition phase and start of full deregulation upon the effectivity of the
law. As pointed out earlier, the
Court
ruled that all Congress has to do is to reenact
R. A. No.
8180 sans the so-called offending provisions. On the dispensability
of the transition phase, the
Court’s
following pronouncements are relevant. May I quote:
“We shall first resolve petitioner Garcia’s linchpin contention that the full
deregulation decreed by
R. A. 8180 to start at the end
of March 1997 is unconstitutional. For prescinding from this premise,
petitioner suggests that we simply go back to the transition period under
R. A. 8180. Under the transition period, price
control will be revived through the automatic pricing mechanism based on
Singapore Posted Prices. The
Energy
Regulatory Board would play a limited and ministerial role of computing the
monthly price ceiling of each and every petroleum product, using the automatic
pricing formula. While the OPSF would return, its coverage would be
limited to monthly price increases in excess of 50 centavos per liter.”
“We are not impressed by petitioner Garcia’s submission. Petitioner has
no basis as condemning as unconstitutional per se the date fixed by
Congress for the beginning of the full deregulation of the downstream oil
industry. Our decision merely faulted the Executive for factoring the
depletion of the OPSF in advancing the date of full deregulation to February
1997. Nonetheless, the error of the Executive is now a non-issue for the
full deregulation set by Congress itself at the end of March 1997 has already
come to pass. March 1997 is not an arbitrary date. By that date, it
the transition phase has ended and it was expected that the people would have
adjusted to the role of market forces in shaping the prices of petroleum and
its basic products. The choice of March 1997 as the date of full
deregulation is a judgment of Congress and its judgment call cannot be impugned
by this
Court.” (Decision dated November 5, 1997, pp. 17-18).
That is what the
Supreme Court
said.
Mr. Speaker, I have to concede though that the issue of whether to jump right
away to full deregulation or install a transition phase is rich with political
overtones. But whatever we do, we cannot prevent the inexorable increase
of oil prices upon the effectivity of this bill when it becomes a law unless a
price subsidy is set up. It is a rule of thumb according to the
Department of Energy that each $ 1.00 per
barrel increase in the cost of crude oil requires a weighted average of product
price increase of 20 centavos per liter, and that each one peso per US $
devaluation requires a weighted average product price increase of 13 centavos
per liter.
To help ensure the success of oil deregulation, apart from the new definition
of predatory pricing, the present bill recommends the following additional
features:
1. Institutionalization of the concept of government
intervention and private suits to address the problem of antitrust
violations. Specifically, the government may file an action to prevent or
restrain any act of cartelization or predatory pricing, and if it has suffered
any loss or damage by reason of the antitrust violation it may recover
damages. Likewise, a remedy is made available to a private person who
suffers loss or damage by reason of any act of cartelization or predatory
pricing.
2. Requiring oil refiners to list their shares and offer 10%
thereof to the public through the stock exchange. It is hoped that this requirement
will foster more transparency and accountability on the operations and pricing
policies of the oil refiners and improve their public image. For a listed
company, among the data required to be disclosed are their quarterly financial
statements, profit margins and pricing strategy.
3. Enhancing the data-gathering powers of the
Secretary of the Department of Energy.
Mr. Speaker, the
Supreme Court
said, “the ball is now in our hall.” So, this
House must act swiftly but judiciously.
The
Supreme Court supplied the answers to many of the constitutional and legal
questions which Members of this
House
are wont to ask. It is hoped, therefore, that the measure at hand will
not be subjected to protracted debates and repetitious arguments. After
all, even the
Supreme Court has
acknowledged that oil deregulation is a progressive piece of legislation.
I respectfully urge our colleagues, therefore, to give new life to the oil
deregulation policy by approving the present bill.
Thank you, Mr. Speaker.
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