PBBM declares 'State of Nat’l Energy Emergency'

MANILA: The Philippines is now under “state of national energy emergency,” President Ferdinand Marcos Jr. declared.

The declaration was based on the signing of Executive Order 110 amid the ongoing tensions in the Middle East, which pose threat to national energy security.

Under EO 110, the closure of the Strait of Hormuz disrupted the fuel supply in international markets, affecting the country being a net importer of the said products.

The newly-signed order is in line with Section 25 of Republic Act 7638 (also known as the Department of Energy Act of 1992), which allows 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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To safeguard national interest, the order will adopt a coordinated, whole-of-government response framework called the Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT).

A committee composed 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 the Department of Budget and Management — chaired by the President of the Philippines — will oversee this national initiative.

Under EO 110, the energy department is authorized to implement fuel and energy optimization plans; adopt and enforce conservation measures; conduct anti-hoarding and anti-profiteering and supply manipulation prevention initiatives; and direct 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 fuel and petroleum products and may 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.

To mitigate the impact in the transport sector, the transportation department will be allowed to give fuel subsidy allocations, commuter fare subsidies, expansion, as well as conduct appropriate measures to trim down costs such as the temporary reduction, suspension, or deferral of toll charges, among other measures.

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. also signed Republic Act 12316, which gives 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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