President Gloria Macapagal Arroyo has not closed the door to suspension of the Value Added Tax on oil products, and has ordered the Department of Finance to study the ramifications of such a move, Secretary Cerge Remonde of the Presidential Management Staff said yesterday.

Remonde, who along with Deputy Presidential Spokesman Anthony Golez was in Bacolod as a guest of the Citizens Movement for Good Government, said the ramifications of the removal of the VAT on oil products on government and the economy needs to be determined first.

The United Negros Drivers Operators Center and Federation of Bacolod City Drivers Associations, who are set to hold a two-day transportation strike Monday and Tuesday against the rising prices of fuel, are calling for the scrapping of VAT on oil and agricultural inputs.

Bacolod Bishop Vicente Navarra yesterday also said he supports the call for the lifting of VAT on oil and agricultural inputs to ease the burden on the people whose suffering has worsened.

Bacolod Rep. Monico Puentevella has filed a bill in the House calling for the suspension of VAT on oil products for a year, while Senator Mar Roxas said the President should open the doors to a national debate on the fate of the 12 percent VAT on oil instead of putting the brakes on every single proposal to reduce or remove it.

Remonde said it is unfair for some sectors to blame the President for the VAT .

“In the first place if we speak about VAT, we are speaking about legislation, which is something that the president cannot amend or change,” he said.

“It is something that Congress should address, if the Senate and House want to change that policy, that is perfectly within their right,” Remonde said.

Calls for the suspension of VAT is a populace stand and a convenient way out, and the president has ordered a study to determine its ramifications, he said.

The greater implication is that suspending VAT on oil could impact on the credit rating of the country that could be downgraded by international credit rating agencies, Remonde said.

“Under the administration of the president the credit ratings agencies worldwide upgraded the Philippines from poor to unstable to now stable, that is the reason why the peso is strong,” he said.

In the face of the global food and rice crisis we are holding up relatively well because the peso is strong, he said.

“It is popular and easy to win votes if we remove VAT.

Responsible governance requires that we study the consequences first. The administration has a country to run, and an economy to attend to,” he pointed out.

“We are a country in the past with band aid solutions and look where it got us,” he said, adding that president has put a stop to this.

“It is only under this administration that we have been able to attain and sustain real economic growth in more than 30 years at a very high political price. The president has become very unpopular for decisions she has had to make but that is the burden of governance,” Remonde said.

“Governance, after all, is not about always being popular, because always being popular is not necessarily what is always to right,” he added.

“It is easy for the politicians, especially for the opposition, to posture for what is popular, we have to consider what is right…that is the difference between the politician and the statesman,” he said.

When we exempt certain products from VAT it is like telling us go back to our old ways, Golez said.

We will go back to our vicious cycle of higher inflation, a decrease in the value of the peso, less money for government services of the poor, Golez pointed out.*CPG

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