The Supreme Court decision said the 1996 law created unfair advantages for the three long-established oil companies: Petron Corp., Pilipinas Shell Petroleum Corp. and Caltex (Philippines) Inc. To provide a more broad view on the matter being discussed, the author interviewed five people from different sectors and of different specializations. 22 The petitioner turned his attention to the phases that happened after the approval of the R. A. 24 And because of that, the law is a very vital and grave abuse of discretion on the part of the legislative and executive branches of government. 6 of the R. A. B. It may also reduce the problem brought by the weakness of the Philippine peso. 8479 is cleared of any constitutional flaws. Due to Republic Act 8479 entitled “Downstream Oil Industry Deregulation Act of 1998” approved on February 10, 1998, the Philippine government effectively reduced its control on oil-related pricing activity and trade restrictions. Contrary to expectations, diesel and other petroleum product prices have consistently risen at a seemingly accelerating rate unfair to the average Filipino. Second, it will block the entry of effective competitors. Due to an oil crisis’ occurrence in 1997, the government created the Oil Industry Commission (OIC) to regulate the goings-on of businesses working with oil. The transition period should last up to five months following the enactment of the law but with the power granted to him at that time, President Fidel V. Ramos accelerated the start of full deregulation through E. O. It is notable that the so-called Big 3 oil players (Petron, Chevron and Shell) used to corner nearly 100 percent of the Philippine petroleum market before the passage of the Downstream Oil Industry Deregulation Act of 1998. In reviewing the constitutionality of the Republic Act 8479, it is necessary to know what was changed from the first oil deregulation law which was the Republic Act 8180, “An Act Deregulating the Downstream Oil Industry of 1996”. 10 The Oil Deregulation law was enacted to address this new framework of the Constitution. It also claimed that an indefinite period of time would only discourage new players for they hoped that the price regulation would be lifted within a reasonable time. If it has been found that the oil deregulation law is against the constitution or perhaps failed to induce competitiveness, the government would do well to reconsider and implement new policies or even revise or amend it for the sake of public welfare. 8479 will form a task force with members of the DOJ and DOE to investigate anomalies in the deregulated oil industry. Many argue that the oil industry is an oligopoly of the big three (Petron, Shell, and Caltex), meaning that they can influence the price and output of the market by themselves. Anonymous. The statement by the Philippines Tariff Commission about competition policy is an evidence that the government should issue anti-competitive practices in the country. Policy issues are within the domain of the political branches of government and of the people themselves as the repository of all state powers. The DOE should give the consumers assurance on the pricing, for they are obliged to monitor increases in the gas prices from time to time. Results should be disseminated and scrupulously explained to the public at large to put to rest the clashing beliefs of the two concerned parties. The verdict will be given later if indeed the oil deregulation is not against the goal of the constitution as well as the law itself, which is to make the oil market competitive that runs with fair prices. Apparently not, as the third part will discuss the different reasons from various persons and groups why RA 8479 is unconstitutional. However, President Benigno Simeon C. Aquino himself was firm that deregulation will not be repealed, claiming that it will only create an artificial picture of low fuel prices while keeping the pressure on the resources of the government. 62 and now it went up to 300% ranging from P48. In response to the consequences of deregulation, the first three solutions presented explored what can be done with the existing law in force. However, the state of the oil industry then and now is different, and it would take a different strategy to deal with a different problem. 2003-05-006 Other solutions include abolition of the value-added tax (VAT) on oil, which found a major proponent in the person of Manuel “Mar” Roxas (Senate Bill 1962), further diversify our sources of energy to decrease dependence on oil (such as the development of renewable sources, but this is another topic altogether), and country-to- country agreements on oil products. Pugad Lawin and the Start of the Revolution, Reserving the nation: ROTC in the Philippines, Lessons on the Peace Process from the Pact of Biak-na-Bato, Conscious Hero or Man of No Ego? 13 Given these issues, it would seem that the oil deregulation law is unconstitutional, a fact which the paper seeks to determine. Marya Salamat March 25, 2014 George San Mateo, Oil deregulation law, Piston. AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled. REPUBLIC ACT NO. 30, 47 Bergen St--Floor 3, Brooklyn, NY 11201, USA, Sorry, but copying text is forbidden on this The definition states that pricing below average variable cost in order to match the lower price of the competitor shall not be considered predatory pricing unlike what was perceived to be pricing for purpose of discouraging a potential competitor in entering the market. Oil Deregulation in the Philippines (Part 2) For the first part of this series, read here. To break the foreigners’ control, with President Marcos’ initiative, the Philippine National Oil Corporation (PNOC). Also, consumer welfare is not guaranteed for monopolistic practices produce abusive price controls and inefficient production. 19 of R. A. Here, we learn that the oil deregulation law is a product of the competition policy. The oil deregulation law’s goal is part of the framework that the constitution wants to achieve. This site contains quotes, articles, ebooks, and other related documents on Philippine historical studies.Philippine History Source Materials. Since the Oil Deregulation Law was implemented in 1998, however, small industry players like Seaoil, Flying V, and Unioil were able to enter the industry. 8180, to be unconstitutional1, is a brief history of the Philippine oil industry. 8180 AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of representative of the Philippines in Congress assembled: CHAPTER I – GENERAL PROVISIONS SECTION 1. Tinker v. Des Moines Indep. For he claims that Sec. The CTRP includes the maintenance of the current VAT on oil products, and a three-phase increase in excise tax on oil. Using the petition of Rep. Garcia against the R. A. 15 Market structures are also enumerated and described here. In this market structure, there are several players entering in and out of the industry, selling similar products with fair competition. A market-oriented formula was also approved by the Energy Regulatory Board (ERB) to know the wholesale posted price of gasoline products to be determined by the adjustments of the Singapore Posting of refined petroleum products, the Singapore Import Parity or the crude landed cost. 8180, to be unconstitutional1, is a brief history of the Philippine oil industry. Shell Corp. filed a rejoinder and further added that if Sec. Ang Oil Deregulation Law ay isang batas na kung saan hindi na hawak ng Gobyerno ang pagtataas ng presyo ng langis dito sa Pilipinas. Lastly, he also pointed out that reviewing the wisdom of the law is not a power of the judiciary, that power is only vested in the congress. Since 1985, it was required to keep 115 days of supply. It paved the way for the deregulation of the downstream oil industry. 8180 to R. A. The first topic covers the Competition Policy framework of the 1987 Constitution. A review of the Philippine Tariff Commission’s statement regarding the competition policy will be used in order to have knowledge on market industries, deregulation, and competition laws in the country. In effect, Philippine legislature has been adamant in ratifying laws both in realization of this provision and the protection of consumers, examples of which are R. A. Which should hinder the big three oil companies make practices that are anti-competitive, which is prohibited by the law such as cartelizing their operations by taking advantage of deregulation. This must not flee from our minds. Hi Al, your blog has been nominated for the Blogger Recognition Award. 8479 February 10, 1998. 27 Interposing economic arguments by the public respondents claim that price regulation is not beneficial to the public as well as to the economy. The study aims to determine whether the law is constitutional: Does its provisions and effects violates the constitutional provision to achieve market competitiveness for public welfare? Ramos, is pro-oligopoly, anti-competitive, and is against the economic welfare of the people. DEPARTMENT CIRCULAR NO. GENERAL PROVISIONS. Up until now, the big three have remain to be most profitable in the market. The last one was the issue on predatory pricing; Congressman Tinge suggested the Arena-Turner test and proposed to redefine predatory pricing. Therefore, you can buy oil when prices are low, and then use them when prices are high. As for my personal opinion on the matter, it can be said that I am not in favor of repealing the existing law. Please, specify your valid email address, Remember that this is just a sample essay and since it might not be original, we do not recommend to submit it. The first one was declared by the Supreme Court unconstitutional in November 5, 1997 for mainly three reasons. There was a time when the country had four refining (Bataan Refining, Filoil, Caltex, Shell) and six marketing companies (Esso, Filoil, Caltex, Getty, Mobil, Shell). Thus, if the law is to be retained, what needs to be explored is on how the government can deal the issue at hand with the existing law in place. Kindly click this link to read the full article: https://firstfilipino.blogspot.com/2017/08/first-filipino-gets-real-blogger.html. No combinations in restraint of trade or unfair competition shall be allowed. He also said that true competition exists only when there can be a sizable number of players, and at that time there was only 3% of the market share which belongs to new competitors. A petition was filed by Cong. Hi there, would you like to get such a paper? 8479, which is to deregulate and liberalize the downstream oil industry to ensure a truly competitive market under a regime of fair prices, adequate and continuous supply, environmentally clean and high-quality gasoline products, would be demoralize. that the 1987 constitution adapted. Boys Who Cry? Security, Unique But for years it has been Petron Corp, Chevron Corp. , and Pilipinas Shell that are enjoying high market revenues. Also what would be the benefits of having the government regulate the oil price? Statement of the Problem The 1987 Constitution has entailed the adaptation of an implicit competition policy framework which refers to all laws, government policies and regulations aimed at the establishment and maintenance of competition that aims to promote, advance, and ensure competitive market conditions by the removal, as well as to redress anti-competitive results of, public and private restrictive practices. Of course, the, is a Filipino Christian historian and writer. Rallyists also seek an oil price rollback and the nationalization of the oil industry in the country. 2 Answers. Declaration of Policy. Relevance. Transition from R. A. What are the bad effect of the Oil Deregulation Law in the Philippines? 19 B. These things may sound familiar, for many people now complain about these things against the government regularly. The years that passed for Philippine deregulation of the oil industry has its own successes and failures. When the government takes action, it may be any of the solutions presented or perhaps a new solution might be thought up altogether. 8479 will be analyzed to give a brief background regarding the law. The petition seeks to know if the new oil deregulation law is indeed constitutional and will ensure equal competitive market and welfare of its consumers. 19 Article XII “which commands the state to prohibit or regulate monopolies for public interest,” the oil deregulation law have become one of the most questionable laws in the country. AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY AND FOR OTHER PURPOSES. 8479 February 10, 1998. He also pointed out that to execute full deregulation depending on the number of new players would be to legislate a floating provision reliant on the happening of a conditional event. Section 14 of the Downstream Oil Industry Deregulation Act of 1998 mandates the DOE to monitor and publish daily international crude oil prices, as well as follow the movements of domestic oil … This video is unavailable. However, Horizontal agreements, where firms agree to the pricing of a good, giving them ability to control prices. • Republic Act. REPUBLIC ACT NO. The thesis aims to closely determine whether or not R. A. However, in 2008 the reserve was decreased to 64 days of supply. The people are forced to just accept whatever reason the oil companies and the Department of Energy gives. This law amends certain sections of PD 87, offering improved fiscal and contractual terms to service contractors with special reference to deepwater oil exploration. • December 26, 2011• Open Access• Big Consumers• Energy Regulatory CommissionIn the PhilippinesElectricity DeregulationFin 111 – AY02 19. And, extending the transition period would bring back the automatic pricing mechanism which means that it will only replace the mode of price regulation by still another regulatory scheme. He added that conviction against monopolies and combination in restraint of trade should be given legal consequence by the court. DigitalEssay.net is ready to help with any kind of academic writing! Discussed in this part are bills that seek to either amend or repeal the ODL, the grounds that makes the law unconstitutional and the violated provision in the Constitution. All he said points out to the question, whether or not the execution of deregulating the oil industry conflicts the mandate of free competition under section 19, Article XII of the 1987 constitution. The statement by the Philippines Tariff Commission about competition policy is an evidence that the government should issue anti-competitive practices in the country. A democratic government such us the Philippines’ is, after all, by definition supposed to cater to public interest and welfare. 19 is anti-competitive, thus it is contrary to what the constitution says. Congratulations! In this agreement, collusion between companies happen. Competition policy contains actions to keep or create competiveness in economic industries, which taking away the power of the government to take control of it, is included. Instead, the prices are kept down by ensuring adequate supply during an oil crisis. What makes this an alternative to the OPSF is that the country does not keep prices down by pouring in money to oil companies. Academic Content. Consumers and transport groups alike have thus repeatedly called for temporary or permanent reestablishment of price controls, only to be ignored by a government firm in the belief that deregulation as part of a liberalized approach to the economy will ultimately benefit the country in the long run. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: CHAPTER I GENERAL PROVISIONS. The effectiveness of the program in the U.S. case had been witnessed during the 1990 oil crisis. Marya Salamat February 10, 2015 1 Comment Oil cartel in the Philippines, Oil deregulation law, oil price hike. Favorite Answer. The oil deregulation law’s goal is part of the framework that the constitution wants to achieve. 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