WIN TRANSCRIPT | CNN The Source interview of Senator Win Gatchalian with Pinky Webb on fuel prices

: Sabi ni Congressman Joey Salceda that the worst is yet to come. Do you believe this?

SEN. WIN: I agree with him Pinky because there’s great uncertainty with this Ukraine Russia crisis. Nobody knows, we don’t have a crystal ball that can predict whether When will this crisis will end and as long as there’s uncertainty, prices of oil and gas will go up, that’s certain. We’ve seen that in the past oil crises. We’ve seen that last year when the global economy opened, and with this uncertainty, we have to brace for the worst. Oiil prices might even reach $150 per barrel if this uncertainty persists.

Q: And right now it’s about what? 113 or 115 per barrel?

SEN. WIN: It fluctuates between 110 to 120. But with the latest pronouncement of the US that they will cut purchases of Russian oil in the UK and will also cut purchases of Russian oil until the end of the year. That will have a tremendous impact because, where will the UK source their oil? They will probably source one from where we get our source, pushing us out and curbing global supply.

Q: Yeah. So when they say, Senator Win na anlayo naman ng Russia and Ukraine satin and we don’t get our oil from Russia, there is actually this domino effect that was, as you mentioned a while ago, the recent development in the US that they will stop the importation of oil from Russia.

SEN. WIN: But let me just say this no, the energy business is a long term business, meaning we have to have the solutions now in order to prevent problems in the future and what we are seeing here in our country right now is years of neglect, because we haven’t discovered a single new drop of oil and gas after Malampaya and that’s 30 years ago. We’re heavily dependent on foreign oil that means 100% of our gasoline diesel is supplied from abroad. We import 100, almost 100% of our coal and that’s 50% of our energy mix. So in other words throughout the years, we rely so heavily on imported materials, and that makes us very susceptible to price shocks. We also remove our shock absorbing mechanism if you remember the PSF was a means to shock absorb fluctuations of global prices, but we removed that, instead we replaced it with Pantawid Pasada, which I think is very effective because it’s targeted, but unfortunately to implement Pantawid Pasada can take 60 days, meaning patay na ang kabayo before we can implement that. So we have to also institutionalize a shock absorbing mechanism and this is the Pantawid Pasada, making sure that whenever there is an abrupt increase in prices, we can remit the cash to our drivers immediately. Instantaneously if we can.

Q: Yung sinabi po ninyo a while ago just so we can better understand the situation. This has been years or decades of neglect. Whose fault is that?

SEN. WIN: Well, the Department of Energy is in charge of discovering new oil and gas. They’re in charge of lessening our dependence on imported materials. They’re in charge of making us self-sufficient by using renewables, by using biofuels. We have all the laws in place, we have an energy efficiency law that will reduce consumption of electricity. We have a biofuels law that will use indigenous materials such as sugar cane and coconut. In our fuels, we have the renewable energy though, which will increase the use of renewables, all of these laws are in place, but we need to have, we need to be more aggressive and we need to roll out the red carpet to investors because our regime is a deregulated regime, meaning private investments are welcome but we need to make it easier for them.

Q: And we have not done that. Not us you’re saying basically the Department of Energy has not done its job. Good enough or well enough?

SEN. WIN: Well, Pinky I mentioned this before, to get a permit to build the power plant takes about four years, just a permit lang to ah. to get a permit, to get your documentation, to get all the signatures in place. It takes about four years and you can ask any power plant, any proponent of a power plant to do that to validate this information. It takes another three years to build the power plant and seven years to inject a single watt of power into the grid. So in other words, if you are forecasting to have a shortage seven years from now, you need to build a power plant now, because that’s how far off you have to forecast in order to inject new power.

Q: Does it take four years for permits to be fulfilled? And of course, wag na po yung three years to build the power plant. What is the problem? Why is it taking four years para lang makakuha o ma-approve ang isang power plant?

SEN. WIN: Our country has always played with red tape and bureaucracy. Yan ang pinakasakit ng bansa natin. Because the permit goes all the way down to the barangay level. That’s why we have enacted the energy virtual one stop shop law in order to give DOE extra powers to cut red tape and to give DOE the power to even issue a provisional permit, that’s in the law. But again, the law should be implemented without implementing the law. It’s just a piece of paper. So it’s important that you, moving forward, the next DOE secretary should be a visionary having a long term view on long term problems. The next DOE secretary should have the political will to implement the law and most especially the new DOE Secretary should have solutions now in order to prevent problems of the future.

Q: Are you happy with the work so far of Secretary Cusi?

SEN. WIN: Well, we’re experiencing Pinky all of us being a consumer, we’re experiencing high prices of oil, we’re experiencing high prices of electricity in the next few months in the coming summer. There is a big threat of brownouts and as a consumer, I’m not happy because I don’t think we can run a business with the threat of brownouts. I don’t think we can run any business with the threat of high prices of oil. So we’re suffering right now as consumers because of lack of foresight and lack of vision.

Q: So he’s not doing a good job for you.

SEN. WIN: For me, my basic answer there is, yes.

Q: Okay. Let’s get that clear. All right. So I want to talk about the leader. I hope we have time for that. No, because I was mentioning a while ago for your radio interview regarding how our power plants get their permits and how long it actually takes for them to establish or to build these power plants. And as you mentioned a while ago, para lang po alam natin seven years on average. The next question to that is, are there enough investors who actually want to come in knowing that this is the timeframe that they will have to well experience or, or have to go through before the actualization of a power plant?

SEN. WIN: Pinky businesses will always look for a good opportunity. And because we’re a growing country, our economy is growing at a clip of about 5% to 6% pre pandemic time, our population is growing, meaning the consumption of electricity will eventually grow. And that’s an opportunity for business people and for businessmen to come in and invest in our power sector. And the proof of the pudding there is, whenever there’s a bidding, it goes through a CSP. You’ll see a lot of power players coming in. But we are seeing the same power players coming in the same personalities, the same companies. What we need is to spread the base, attract new players, attract foreign capital to come in. But the foreign capital will only come in if it’s easy for them. If they experience red tape and corruption, then they’re not going to come in. So in other words, yes, the short answer to that is, there is private capital, private capital, investing into the power sector is there but we need to run out the red carpet for them.

Q: Make it a little bit more attractive. So there’s no dearth of investors coming in. Let’s go back to our initial talk about the prices of fuel, sabi po ni congressman Salceda na possibly by next week, 11 vessels per liter, what kind of computation Do you have? And let’s also understand again the situation because we average this on a weekly basis. In other words, if the prices of crude per barrel is 200, yesterday, it’s 110 the other day and 120, the day before that, this will have to average on a seven day average. And then hence that’s when we know the kind of increase na i-implement because the increase has only come in once a week. What is your estimate right now, so that the public can be made aware of how much to expect in terms of you will prices.

SEN. WIN: Prices have gone up by an average of 20% from 30 days ago, and with the projections that I’d see the possibility of going up by another 10 pesos per liter is not remote. The question there is when, if the wire will prolong, meaning it will take another 30 days or even longer than that 10 pesos, then it will happen sooner. I don’t think I can give you a direct answer, but the 10 pesos increase will happen, it’s just a matter of when because of the uncertainty. But again, if Russia and Ukraine decide to come up with a win-win solution and then come to terms, then obviously that will not happen, but with uncertainty the 10 pesos will happen.

Q: What is the worst case scenario you’re looking at?

SEN. WIN: Well, I’ve seen a lot of analysts talk about this with some forecasting $200 per barrel and some are forecasting even more. What we have to take note is that Russia is a major oil supplier, it supplies about 10% of the global supply, that’s about 7 million barrels per day and if the entire EU will stop buying from them, that entire EU block will buy from somewhere else, you will probably buy from where we are buying, “we” meaning the Middle East, so that will push us out and supply will will go down and that’s what’s pushing the prices upwards, in other words, we also have to think of the worst in terms of supply. We’re just talking about prices. But we have to also think of the worst when it comes to supply because in our policy, companies are mandated to store 30 days of inventory 30 days there’s no more supply. So I’m actually proposing to increase the minimum oil inventory to 45 days, again that extra 15 days of buffer. And the government to subsidize the carrying cost because when these companies buy another 15 days, they have to pay for interest. And that’s where the government comes in in terms of energy security.

Q: Yeah, I wanted to actually go there because from my understanding with the DOE Undersecretary, oil companies have a buffer of about 30. In fact, if I remember right, I said 30 to 40 days, but you just clarified that that’s 30 days. Your proposal now is to increase that to 45 days. So earlier you said that it seems that the Pantawid Pasada program will suffice for now. I think I heard you say that. A while ago the government was planning 2.5 billion, but an additional 2.5 billion is being proposed. I’m not sure if that is with certainty already. So sapat po ba talaga ito, number one ha, and number two, are you concerned that it’s taking a while before the drivers actually receive this ayuda from the government?

SEN. WIN: Pinky the Pantawid Pasada is a form of replacement from the OPSF. This is a shock absorbing mechanism, meaning whenever oil prices go up, the fear is it cannot go up In tandem with that oil prices. So, we need a shock absorbing mechanism temporarily meaning it can be as long as 30 days or even 60 days. But we need a shock absorbing mechanism and this is the shock absorbing mechanism. But you have to give it fast because the oil prices are going up fast. Fears are not going up as fast as the oil prices. So we need a mechanism or in which the drivers can tap into in order to alleviate their daily needs or alleviate their daily income. So this is, unfortunately, it’s taking a lot of time to give to the drivers but we have to remember, every year we give out Pantawid Pasada. Last year we gave the Pantawid Pasada during the pandemic, we gave the Pantawid Pasada the year before we gave the Pantawid Pasada. We need to institutionalize this by putting all the drivers, the tricycle drivers in the database and use the most modern technology to remit it to them, for example Gcash. If we can remit money through Gcash to our drivers then that’s the best because they will get the subsidy instantaneously.

Q: Do you think it’s the medium that’s causing a problem? the medium by which this money will be distributed? Do you think it’s the database? because if you ask government officials, they are already looking at 377,000 if i’m not mistaken drivers no. I don’t think this includes other tricycle drivers though. My question is bakit po nagtatagal, I asked that Senator because what, this is the 10th consecutive week that prices have gone up and yet what, it will take on the 11th week bago nila matanggap yung pantawid pasada yung kanilang ayuda, alam naman natin kung gaano kahirap iyong buhay at kung gaano kaimportante yung kanilang kinikita araw-araw.

SEN. WIN: Yes, Pinky the name of the game with the shock absorbing mechanism is speed. You have to give it as fast as you can because what we’re absorbing is the abrupt change. And if you cannot give it to our drivers, they will be the one bearing the increase or the abrupt increase in prices. And that’s what we don’t want because if their income will diminish, obviously they will have very little income to bring to their homes in a very little income to buy food. So we need to subsidize that in the short-term. But as far as information is concerned, what’s happening is the validation. The database, the remittance process all of which can be done electronically. They’ve seen it, we’ve seen this during the pandemic that giving ayuda takes time if you do it manually, it’s the same with pantawid pasada. So we just have to do it electronically and institutionalize it because every year we actually give up pantawid pasada.

Q: Yeah, but so, would you say you’re disappointed by which? Siguro sabi mo nga the game here is speed. And obviously, sir, it has not been fast enough. Are you disappointed that right now di pa rin nila natatanggap ang kanilang ayuda?

SEN. WIN: Yes, of course, I’m disappointed because every time our drivers go out and they cannot increase fares, they have to bear the brunt of that high oil prices and that will eat up in their income and disappointed because they cannot take on enough money for their families and that’s where the pantawid pasada will come in or else malulubog iyan sa utang. in the short- term, they’ll probably go out to the to five six or to some loan shark to borrow and wait for pantawid pasada to come in and pay those debts but then again that will have interest and that will also hamper on their income. So in other words, what I’m driving at is this, we give our Pantawid Pasada every day, there’s no reason for it to be delayed. Because it’s already in the database. It’s already there. There’s G cash and E wallets that we can use to remit that instantaneously. I don’t see any reason why this is taking so long.

Q: But what is the possibility if the database is there? E wallet is available. What’s taking too long?

SEN. WIN: Actually Pinky the money is already there. 2.5 billion is already there and if you look at the quick response funds of the different agencies that will add up to about 6 billion. So the money is already there. It’s just a matter of giving that money transferring it to the pockets of our drivers.

Q: Yeah, so it’s still it still doesn’t answer my question. Bakit di pa rin nila nakukuha.

SEN. WIN: Like I said, Pinky, our government is always plagued with red tape and bureaucracy. And it’s also a sickness in the giving out of ayuda. In giving out of this type of subsidy. We need to overcome the red tape and bureaucracy of our government and again, we have to use the most modern technology to do that, it can be done, it can be done.

Q: And it is ironic, sir that for so many years we’ve been giving out ayudas, obviously even to the poorest of the poor on the ball, and yet right now, there’s still a delay of such that you know, you’re looking at the possible emergency situation already for the drivers and we’re just talking about drivers here. We’re not even talking about the other Filipinos or us, yun pong mga taong apektado nitok. Just quickly I want to talk about excise Taxes okay there’s been calls to suspend excise taxes. Okay, let’s already say that andiyan naman ang pantawid 2.5 million, dadagdagan ng 2.5 billion. What is your stance on excise taxes? When should this be suspended?

SEN. WIN: Okay, Pinky, I’m open to suspending excise tax as a last resort. You have to remember suspending excise tax will take away approximately 90 billion pesos from government coffers. That’s a lot of money. If you juxtapose that with Pantawid Pasada, Pantawid Pasada is only 5 billion. So giving out 5 billion versus taking away 90 billion is a big difference. But that should be the last resort.

And I would say that if the situation becomes prolonged and the prices of oil become elevated for a long time. Now how long is yet to be discussed? If we look at the old TRAIN law, if prices of oil will go up and remain elevated for three months months. Yes, we may suspend excise tax. So in other words, three months is the timeframe threshold that we’re looking at. But I’m open to that. But that’s the last resort.

Q: But is that an amendment or does it need an act of Congress to be able to suspend excise taxes or can the executive do this? Tanggalin muna natin yung three months, 80 barrels $80 per barrel?

SEN. WIN: Yes, it means it needs a new law no, because that provision of three months timeframe has expired already. So we need in other words, Congress needs to convene, come up with a new law to give the power to the president to suspend excise tax if necessary.

Q: Senator you’re saying dahil napaso na yung three months $80 per barrel because this was supposed to be in 2018, 2019 and 2020 when there were three tranches of increases in excise taxes,

SEN. WIN: Correct the logic there is because we are adding excise taxes on fuel, in the event that prices of oil remain elevated for three months at 80 barrels for $80 per barrel. Government has the power to suspend it. That’s in the context of increasing excise taxes on fuel but since we already increased it, then we have suspended or we don’t have any more power to suspend excise tax.

Q: Sir there’s so much I want to ask you but this is important. Sabi mo as a last resort yung suspension of excise tax. I know that you looked into this and you have been also chairman of the energy committee, at what point is the price point would you say, if it will actually push you to already call for the suspension of excise taxes?

SEN. WIN: The minimum benchmark before is three months at $80 per barrel. Obviously right now we’re averaging around 100 to 120 per barrel between like that for the last probably 20 days. So if you asked me if prices would remain at $120 per barrel, I’m probably looking at probably about 45 days to 60 days till we trigger their suspension and that’s a possibility because of the war. In the past few increases in oil it’s all temporary, an increase in demand, some aberration in Saudi Arabia, but this in this particular case, it’s a war and we don’t know how long will this take? So I’m looking at it with our own calculation. I’m looking at an elevated price of about 120 probably around 45 to 60 day threshold.

Q: And if that happens that’s when you would really push for the suspension of excise taxes. What is your standard on nuclear plants?

SEN. WIN: The Senate has been funding the deal, the nuclear research deal since 2018. We found that approximately 266 million to study the possibility of injecting nuclear or using nuclear power in our energy mix. I’m open in looking at nuclear power, as a source of our energy. I’m open to looking at newer technologies of nuclear energy. There’s so many new technologies now these small modular reactors, the materials, nuclear materials that can be recycled. There’s so many new technologies so I’m open. However, the study should be made public, the study should be made available to those who are interested in this technology. Transparency is very important when we talk about nuclear because this is a risky fuel source and we need to understand whether the benefits outweigh the risks involved in nuclear energy.

Q: Is there even a chance for the revival of the Bataan Nuclear Power Plant?

SEN. WIN: Let me just erase some misconceptions because I’ve been to the exact same plant of Bataan Nuclear Power Plant in Slovenia. And during that time, Senate President Koko Pimentel invited us to look at the brother or the sister of our Bataan Nuclear Power Plant in Slovenia. It’s operating the same supplier, the same age, the same technology even the same thing. Yes, however, that plant is not selling cheap. It’s selling approximately at five pesos per kilowatt hour. So the nuclear plant in Slovenia is not cheap. If you look at the prices of natural gas prices, prices of coal, even RE with batteries, they’re cheaper so in other words why we open up a plant we’re in we will not get cheap electricity. Now understand I’m open to be an open to to validate this information because when we went there, I talked to the CEO himself and I was very concerned with the safety and also the pricing because if we do open Bataan nuclear power plant, we have to make sure also that this is economical for us.

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