THE WARNING this week by Sen. Juan Miguel Zubiri, that oil companies were funding a campaign against the Arroyo administration’s program to develop biofuels, is one which should be heeded.
Sen. Miriam Defensor-Santiago has raised the alarm against biofuels, saying that the government needs more oversight over the biofuel program as it could adversely affect the country’s food production.
This objection to biofuel projects, that land given over to crops used to produce ethanol will ultimately take away from land that would otherwise be used for food crops, is not new and is the standard objection that has been cropping up lately.
The Philippines is dependent almost 100 percent on the import of oil products, which means the country has been suffering with the price of oil hovering around $100 a barrel, and no signs of weakening anytime soon. What the country needs to do is look at the example of Brazil, which has been running an ethanol fuel program since 1979, and where all cars now run on a mixture of fuel that is 22 percent alcohol and 78 percent gasoline.
Brazil’s ambitious biofuel program has provided nearly 700,000 jobs in 2003 and cut oil imports from 1975-2002 by a cumulative total of $50 billion. More than 30 percent of the country’s automobile fuels now come from sugar cane-based ethanol.
The Philippines has a vibrant sugar cane industry, thus is able to start a massive ethanol program based on sugar cane. Admittedly, the country is much smaller than continent-sized Brazil, but even so a vigorous program of alternative fuel production would help greatly to break the Philippines’ crippling dependence on foreign oil.
Naturally, Petron and Shell are probably not very happy with the Arroyo administration’s plan to pursue a biofuel program, but that does not matter. Fossil fuels are a not an unlimited resource, and one day the planet will run out of them. Sustainable sources of energy, such as ethanol, should be the way forward for developing countries like the Philippines, which cannot afford to be paying huge amounts of hard currency for oil imports.
It will be interesting to see if Santiago’s objections will manage to slow down the biofuel program. Hopefully, the Arroyo administration will not be distracted by such diversionary tactics and will endorse a robust biofuel program. The direct link between soaring costs of imported oil and the inflation it unleashes in the economy, is the main reason why the country so desperately needs such a program. The poor people of the Philippines deserve no less.
THE CALL of labor recruiters this week for Philippine Airlines to restart their flights to the Middle East comes not a minute too soon.
Although the strong peso and weakening dollar have caused OFW remittances to shrink, the Gulf is currently undergoing a building boom that is going to demand the hiring of many Filipino workers. In Abu Dhabi, Dubai, Doha and in Saudi Arabia, mega-projects for huge economic cities, cultural centers and airports are creating a demand for engineers, supervisors, and workers that the Philippines is well positioned to fill.
Unfortunately, especially during peak travel periods, there is an acute shortage of airplane seats from Manila to the Gulf. PAL should step in now and restart its flights to Dubai, Abu Dhabi, Bahrain and Saudi Arabia, in order to give passengers a wider choice of air carriers but also to relieve the immense pressure of overbooking that other carriers are now facing.
I asked a PAL official last year why the airline had axed its Saudi and Gulf flights, and she told me it was because competition was so stiff with other Asian and Gulf carriers on these routes that PAL felt it could not compete.
Why wasn’t PAL making enough money on its Gulf routes? Was it because PAL was over-unionized? Or was it because it did not receive the same subsidies that the national carriers of many Gulf countries get from their governments? I’m not sure as I’ve never seen their operating figures. But I still think that PAL could make good money on its Gulf routes if it put its mind to it. There are one million Filipinos alone in Saudi Arabia, and hundreds of thousands more in the Gulf. Surely, they could provide enough revenue passengers to make it worthwhile for PAL to fly here again.
THE Land Bank of the Philippines is going to offer high-yield deposit instruments for OFWs in a bid to help them cope with the shrinking value of their remittances. Most OFWs have seen their dollar-denominated remittances shrink an average 20 percent over the past year due to the burgeoning power of the peso. Many OFW groups had lobbied the government to give them a favorable exchange rate in order to protect their families in the Philippines from the shrinking value of their remittances.
The Central Bank has consistently denied any special exchange rate mechanism for OFWs, saying it would be unfair to other Filipinos and saddle the government with huge amounts of debt.
President Arroyo is due to launch this new initiative to help OFWs in Dubai at the end of this month. I think this is an excellent move and one that OFWs should embrace as a safe way of investing money and earning a good return.
According to the Land Bank, the certificates of deposit in this scheme would be for five years and would not be allowed to be pre-terminated. The plus side to this is that it would be a “mandatory,” medium-term, way of saving that would be tax-free.
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