PHL officials: Indonesian govt studying Pantawid Pasada program

JAKARTA, Indonesia — With plans to veer away from wholly subsidizing oil prices, the Indonesian government is now looking into the Philippines’ fuel subsidy program on the transport sector as a possible model. “They (Indonesian officials) are actually looking at our Pantawid Pasada system. Instead of subsidizing everything they will now move into direct subsidies to specific sector, mainly the transport system," Energy Secretary Jose Rene Almendras told reporters Saturday. Almendras is in Indonesia as part of President Benigno Aquino III’s official delegation to the 18th Association of Southeast Asian Nations (ASEAN) Summit being held at the Jakarta Convention Center. The Indonesian government allocates as much as $10 billion a year to subsidize the daily fuel requirements of its people. Due to the increasing demand for oil, Almendras said the Indonesian government has expressed fears of a possible shortage of funds intended for the fuel assistance being extended to the people. “They are an oil producing country… they do produce oil but they do not have enough for their present demand. The President of Indonesia is worried about how they are going to handle it when and if they ran out of the money they set aside," he said. “When their money runs out… they are going to shift to specific targeted solutions," he added. Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang said Indonesia’s oil reserves have been depleting, making it difficult for the government to sustain the subsidy. The reduction in oil reserves has also affected their membership to the Organization of the Petroleum Exporting Countries (OPEC). Carandang added that in recent years, the Indonesian government has been reducing financial support to the rising prices and demand of oil. “Nung malakas ang production ng Indonesia ng langis kasama po sila sa OPEC, may subsidy na po yun, at dahil mura ang presyo ng gasoline hindi nila tinitipid kaya medyo nag-deplete ang oil reserves nila… sa katunayan hindi na po sila miyembro ng OPEC at dahil dito nagkaron sila ng problema na i-sustain ang subsidy nila, so over the last 3 to 4 years binabawasan na nila ang subsidy," Carandang said. “They are moving away from almost a universal subsidy on fuel towards a more targeted subsidy like we have in the Philippines, and this is an economy that is larger than ours in absolute terms," Carandang noted. The Philippine government officials were able to talk with their Indonesian counterparts during a bilateral meeting at the sidelines of summit. Aquino issued Executive Order No. 32 instituting the Public Transport Assistance Program (PTAP) or “Pantawid Pasada" program that initially allots P450 million to assist drivers and operators of public utility vehicles. The program, which started in May, will partially subsidize the average consumption of identified public transport groups, provided that they have legitimate franchises under the Land Transportation Franchising and Regulatory Board (LTFRB). They will use “smart cards" issued by the Department of Energy. The Palace earlier estimated that the government's fuel subsidy program could only be carried out for only around two months. Militant transport groups opposed the program saying it will not do much to cushion the impact of rising oil prices. They want the government to either remove the value added tax on oil products or scrap the Oil Deregulation Law. - KBK, GMA News