Press Release
July 3, 2009


Launches TV Infomercials

Senate President Juan Ponce Enrile took his long-time advocacy against the burdensome royalty taxes on natural gas to new heights with the launching today of two (2) TV infomercials aimed at educating the public, as well as policymakers, on Senate Bill 3282, more popularly being referred to as the proposed "Electricity Rate Reduction Act of 2009".

The first infomercial is a 30-seconder material entitled "Jenga" which showcases how a reduction in royalty fees on indigenous natural gas will result in significantly lower power generation costs for consumers. "Power generation cost constitutes the biggest component of our monthly electrical bills. The royalty taxes imposed on locally-sourced natural gas, on the other hand, comprises a significant part of such power generation cost. A reduction in royalty taxes, therefore, will ultimately bring down our monthly electrical bills. This is the most significant, direct and expeditious way by which our government can show sincerity in its much ballyhooed campaign for lower power rates. My Senate Bill, in effect, challenges our government put its money where its mouth is", Enrile explained.

The second is another 30-seconder material entitled "Teacher" which highlights the disparity between the higher royalty fees imposed on indigenous natural gas against the significantly lower taxes imposed on both imported coal and oil. "Imported coal and oil used for power generation is taxed no higher than P0.22/kWh. The royalty tax imposed on natural gas that is drawn from Philippine sources, and used for the same purpose of generating electricity, on the other hand, is being taxed at P1.79/kWh, or eight times higher. This disparity has effectively made a local energy resource that is friendlier to the environment, a whole lot more expensive than imported fuel sources that also contribute to the problems of global warming. The enactment into law of Senate Bill 3282 will be a most significant step towards correcting this anomaly", Enrile stressed.

Under Enrile's proposed, to government is mandated to reduce its share from the sale of indigenous natural resources. Section 4 of the said measure explicitly provides that such reduction "shall be reflected and passed on to eligible consumers as a reduction in power generation charges".

Enrile reaffirmed the government's commitment to ensure that Senate Bill 3282 in enacted into law before the end of the year. He also pointed out that his proposed measure "will directly result in power cost reduction that will range from P1.34-P2.00 per kWh for business or industrial users, and at least P1.00 per kWh for residential consumers". Representative Exequiel B. Javier, Chair of the House Committee on Ways and Means, shares the Senate President's advocacy and has, in fact, set into motion the House version of Enrile's proposed bills. House Speaker Prospero C. Nograles also confirmed this by saying that he will "work for the bills' passage" noting that these are already in the pipeline.

Other business groups have been pushing for immediate government action on Enrile's power reform bills. Philippine Chamber of Commerce and Industry (PCCI) President Edgardo Lacson has expressed particular support for Senate Bill 3282 which he said will enhance the competitiveness of business enterprises. Lacson expressed optimism that the proposed bills will be passed, saying that "we will make a last appeal to the President [Arroyo]". The PCCI, together with the Joint Foreign Chambers, the Philippine Exporters Confederation and the Employers' Confederation of the Philippines have previously presented to the LEDAC a list of policy recommendations for immediate adoption that included Senate Bill No. 3282.

In a separate statement, the Semiconductors and Electronics Industry of the Philippines, Inc. (SEIPI) urged President Arroyo to certify the power reform bills as priority bills to ensure immediate passage. "We hope that Malacanang and Congress will certify these proposed measures as priority bills for power rates in the country to be lowered and to result in making our industries more competitive against neighbouring Asian countries," SEIPI President Ernie Santiago stated.

It will be recalled that Enrile was elected to the Senate based on a platform of government that underscored strong consumer advocacy, primarily lower and transparent electricity pricing.

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