He added that the job of the Supreme Court was just to interpret and apply the law as conceived and approved by other departments of the government in accordance with the prescribed procedure. Competition Policy One of the most tremendous shift from the 1973 constitution to the 1987 constitution was the implementation of competition policy framework14 that will make sure that markets in the country is free from anti-competitive practices. Answer Save. 8180 was too much for the new competitors to compete with the established oil companies here in the country. The statement by the Philippines Tariff Commission about competition policy is an evidence that the government should issue anti-competitive practices in the country. International oil price data show local oil prices should have been going down rather than up. Also what would be the benefits of having the government regulate the oil price? 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 … Enrique Garcia criticizing the very short duration (five months) before the full deregulation phase be effective provided in Section 19 of the Act. Proposed solution # 2 (scrap/repeal the Oil Deregulation Law) is therefore a better option. Short Title. 10 The Oil Deregulation law was enacted to address this new framework of the Constitution. The years that passed for Philippine deregulation of the oil industry has its own successes and failures. 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. 8479 mainly, the transition phase and the full deregulation phase. The first one was declared by the Supreme Court unconstitutional in November 5, 1997 for mainly three reasons. First, the provisions laid down were already advantageous to the major competitors; it will give more power to the oligopoly of the big three. 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. Academic Content. 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 … The passage of the bill incited protests from groups with the Bagong Alyansang Makabayan (Bayan). 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. The first solution seemed a long shot at the moment, with the administration of President Rodrigo Duterte seeking to pass the Comprehensive Tax Reform Program (CTRP). Even though there are more than 600 companies in the industry and competition seems to be fair within the oil industry,8 the problem still exists — the high prices of petroleum products which has a domino effect to everything in the country. 8180, to be unconstitutional1, is a brief history of the Philippine oil industry. It is therefore in both private and public interests that the policy’s actual effect and its constitutionality be tested through empirical analyses. To further ensure that the rights of the consumers are protected, R. A. The minimum inventory level requirement was also removed from the R. A. What makes this an alternative to the OPSF is that the country does not keep prices down by pouring in money to oil companies. 19 were to be dismissed, there will never be full deregulation and would provide a new law that is different from what was already enacted. Horizontal agreements, where firms agree to the pricing of a good, giving them ability to control prices. The automatic oil pricing mechanism was maintained in order to estimate the local prices of gasoline products in the global market. 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. A. Congratulations! 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”. No. E. Scope and Limitations of the Study. The Constitution provided in Section 19, Article XII that deregulation must be only allowed if the public needs such action. No. Tinker v. Des Moines Indep. It paved the way for the deregulation of the downstream oil industry. Piston submits 7 demands to Aquino. 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. 9 Part of the competition policy framework is the liberalization and deregulation of select Philippine industries such as the maritime industry, civil aviation, telecommunications, energy and utilities. Policy issues are within the domain of the political branches of government and of the people themselves as the repository of all state powers. CHAPTER I GENERAL PROVISIONS SECTION 1. “As the oil price situation worsens, we call for the removal of the excise tax on oil and petroleum products and the junking of the Oil Deregulation Law,” the group said in a statement. 7 Fast-forward to today, many petitions has been filed to repeal or amend the act but not one has been actually successful. 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. This site contains quotes, articles, ebooks, and other related documents on Philippine historical studies.Philippine History Source Materials. 8479, they scrapped the former revision and imposed the tariff rates single and uniform for all players. 4 In March 1996, Republic Act No. GENERAL PROVISIONS. The DOE was created by virtue of RA 7638. The first one is the goal of the oil deregulation law, to have a perfect competition in the oil market. 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 first topic covers the Competition Policy framework of the 1987 Constitution. The big three still have 68% of the market share, which has improved from before but still with over a hundred of competitors, the number is staggering and it remains a question why the big three are still controlling the industry even with the oil deregulation law is in effect for 15 years. No. MANILA, Philippines — The Department of Energy (DOE) wants to amend the oil deregulation law and allow the energy secretary to define the maximum price of oil, among others. In October 1997, because of a strike, the Supreme Court issued a temporary restraining order (TRO) against the law and, eventually, deemed as unconstitutional in the decision being discussed earlier on. 8479• Downstream Oil Industry Deregulation Actof 1998• Complete no government interference• DTI as monitorIn the Philippines…Oil DeregulationFin 111 – AY02 18. Therefore, you can buy oil when prices are low, and then use them when prices are high. The law is formally known as Republic Act 8479, or the “Downstream Oil Industry Deregulation Act of 1998.” The DoE has been exploring ways to mandate oil companies to itemize the components of their fuel prices, including the industry’s take, for more transparency. In the past years, the Philippine’s downstream oil industry has been dominated by the three biggest oil players, Petron, Shell and Caltex (now Chevron). If there is a monopoly in a market, income distribution is minimal. 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. The OIC can fix prices of petroleum products, control refinery capacities, license new refineries, and regulate the general operations of affected businesses. 19, not the essence of it. 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). REPUBLIC ACT NO. Security, Unique The high court, however, denied the petition on the grounds, basically, that the argument of the petitioner is not against the law itself, but just against the timeliness of the provided duration for the full deregulation phase. B. Petron Corp. , a respondent, pointed out that a short transition period is beneficial to new players coming in for they will be able to set up their business properly within a manageable time, to set up their prices, taking into account their investment and operating costs. The Oil Price Stabilization Fund (OPSF) was then created,2 in 1984, as a buffer against the fluctuations in oil prices. A better idea is all that it takes. The people are forced to just accept whatever reason the oil companies and the Department of Energy gives. A petition was filed by Cong. Boys Who Cry? Dist. Oil Deregulation in the Philippines (Part 2) For the first part of this series, read here. Ang Oil Deregulation Law ay isang batas na kung saan hindi na hawak ng Gobyerno ang pagtataas ng presyo ng langis dito sa Pilipinas. The digest also pointed out the control of foreign companies over the industry, where almost every operations in the country at the time is owned by these companies. 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. Watch Queue Queue. The thrust towards deregulation was characterized by the passage of RA 8180 (An Act Deregulating the Downstream Oil Industry) in 1996, which basically deregulated the oil industry. AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY AND FOR OTHER PURPOSES. As for my personal opinion on the matter, it can be said that I am not in favor of repealing the existing law. Two months after, the act was replaced by the now-existing R. A. These things can be solved with prohibitions or authorizations, which are few examples of solution for anti-competitive practices. Under Philippine import laws, it is the responsibility of the importer to ensure that any product entering the country’s customs territory is in full compliance with Philippine health and phytosanitary regulations. Deregulation and other measures are used in order to promote economic efficiency. These things may sound familiar, for many people now complain about these things against the government regularly. 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. 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. Republic Act No. The last three solutions presented explored what the government can do beyond tweaking the legal provisions of deregulation… While enumerating the grounds, this part will touch on the effects of the ODL to the oil industry, and to the people. 2 Answers. In his eagerness to write history for all the people around the world, he began the. Ang may mga hawak nito ay ang The Big Three (shell, petron at Caltex) na kung saan sila-sila na lamang ang nagdidikta ng presyo ng langis dahil sa kanilang mga ispekulasyon ng di-umanong “shortage”. that the 1987 constitution adapted. The oil deregulation law’s goal is part of the framework that the constitution wants to achieve. If the idustry is deregulated quality of products can decline and there could be consolidation of existing providers leading to monopoly pricing of oil and gas. Data-gathering will take place within Metro Manila and during the 2nd term of the academic year 2013 – 2014. This Circular establishes the procedures for the Philippine contracting round in petroleum prospective areas. 8479 February 10, 1998. 6 of the R. A. AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY AND FOR OTHER PURPOSES. 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. In response to the consequences of deregulation, the first three solutions presented explored what can be done with the existing law in force. Historically, the Philippine oil industry has been deregulated. Furthermore, he stated that if they allowed an open ended transition period with pricing regulation by the government, the liberalization of the downstream oil industry would have been suspended. we might edit this sample to provide you with a plagiarism-free paper, Service In 1977, the government created and maintained a Strategic Petroleum Reserve (SPR). Because of this, he suggested that the transition phase should be prolonged while the big three are still dominating the market with price controls so that the public can be protected from a possible overpricing or fixed pricing from the big three. 20 In this topic, a case study of the petition of honorable Enrique T. Garcia in 1999 against the 1998 Oil Deregulation Law is essential to know if R. A. ENERGY Secretary Alfonso Cusi is pushing for the revision of the oil deregulation law so his office can enforce a proposed policy that seeks to unbundle fuel prices. No. The petition of Rep. Garcia regarding the unconstitutionality of Sec. 65 to P54. The transparency of the oil prices has been an issue for the consumers as oil price hikes have not stopped since the law was approved by the congress. SAMPLE. The law allows the free participation of the private sectors and cooperatives in developing more gasoline stations. This was before the first “oil shock” in 1973, which saw soaring oil prices resulting from the decision made by the Organization of Petroleum Exporting Countries (OPEC). To sort out pricing The Department of Energy (DOE) is pushing for new amendments to Republic Act 8479 or the Downstream Oil Industry Deregulation Act – and the specific agenda this time is to define “fair pricing adjustment” at the retail pumps. • Republic Act. 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. For the second part of this series, read here. In a budget hearing in Congress, DOE Assista DEPARTMENT CIRCULAR NO. 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. Watch Queue Queue Phase one, the transition phase which started in August 1996, aims to take away control over non-pricing related aspects while phase two, the full deregulation phase, now includes the pricing itself, which abolishes the OPSF. 26 Subsequently, respondents claim that the decorum of full deregulation is a non-justifiable issue for it involves the perception of congress and the acceleration was also recommended by the DOE and DOF because of the two conditions that were discussed earlier. If, however, the opposite has been concluded and the oil deregulation is in fact deemed to attain its goals, the government must focus its energies towards ensuring that the expected benefits are actually felt by consumers. When the government takes action, it may be any of the solutions presented or perhaps a new solution might be thought up altogether. Contained in a November 5, 1997 Supreme Court decision, which deemed the first oil deregulation law, the Republic Act No. 62 and now it went up to 300% ranging from P48. Working 24/7, 100% Purchase 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. This must not flee from our minds. HAVEN’T FOUND ESSAY YOU WANT? 8479. Included in the interview will be possible solutions, amendments or replacements to the still-contentious Oil Deregulation Law. It must be known to all the Filipino people that oil deregulation, as a policy, has failed to foster a truly competitive market towards fair prices and adequate, continuous supply of environmentally-clean and high quality petroleum products. Hi there, would you like to get such a paper? REVIEW OF RELATED LITERATURE INTRODUCTION The researchers will cover four important topics central to the thesis. Using the petition of Rep. Garcia against the R. A. No. The Big 3 saw their combined market share decline to 85 percent in 2006. Whether direct or indirect, whatever policy the government shall take will have an advantageous or disadvantageous effect. The case focused on the changed provisions of R. A. No. To know what transpired before the passage of the RA 8479 is important as it will give context and will direct where the thesis will go. Contained in a November 5, 1997 Supreme Court decision, which deemed the first oil deregulation law, the Republic Act No. 8479 which could have given the incoming competitors tough time to be able to keep up with the resources that the big three companies already own. 15 Market structures are also enumerated and described here. In the transition phase, all non-pricing facets were lifted. DigitalEssay.net is ready to help with any kind of academic writing! 19 is anti-competitive, thus it is contrary to what the constitution says. Philippine Oil Deregulation, Oil Crisis, Oil Deregulation Law, Oil Crisis in the Philippines, Oil Deregulation policy, nuclear power plant, bataan nuclear power plant, Energy crisis in the Philippines, oil speculation, crisis, philippine oil crisis, oil, marlou mumar, oil crisis, how to solve oil crisis, power crisis, power crisis in … 8479 in August 1999 as a source, the first part of our literature review will discuss the unconstitutional provisions R. A. 8479. 00 to one US dollar. After scrapping all the unconstitutional provision that made the ODL of 1998 to be successfully enacted, does the new law is clear of any constitution-violation? In a budget hearing in Congress, DOE Assistant Secretary Leonido J. Pulido III disclosed that the department is “collaborating with the Philippine Competition Commission precisely because the Oil Deregulation Law failed to define what is unfair or unjust pricing – and that’s one of the challenges that the DOE is facing when it comes to monitoring prices.” This video is unavailable. 68, and Executive Orders signed to increase Trade and Investment Liberalization. 8479. No. This part is relevant because the grounds that will be listed can be our bases as to what our recommendations will be. 8180, to be unconstitutional1, is a brief history of the Philippine oil industry. Here, we learn that the oil deregulation law is a product of the competition policy. Economic efficiency is comprised of three components namely: (1) Productive efficiency; (2) Allocative efficiency; and (3) Dynamic efficiency. Favorite Answer. A democratic government such us the Philippines’ is, after all, by definition supposed to cater to public interest and welfare. The most controversial issue surrounding the act is the overpriced petroleum products and frequent increases, with vague reasons, but seldom rollbacks like a two-step-forward-one-step-backward situation. Declaration of Policy. 8479 will form a task force with members of the DOJ and DOE to investigate anomalies in the deregulated oil industry. 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. If you need this or any other sample, we 8479 February 10, 1998. To provide a more broad view on the matter being discussed, the author interviewed five people from different sectors and of different specializations. On another note, a law may be good on paper but not in practice. The Philippines is presently having serious concerns with the effects brought by Oil Deregulation Law.1 As the fact that it permits oil companies to freely adjust their oil prices that led to the increase of other basic commodities and resulted to economic crisis as people defined.2. The enforcing authorities will check for compliance by inspecting the goods and relevant import/export documentation and decide on whether the goods may enter the Philippines. FOR ONLY $13.90/PAGE, Deregulation of media access and rates increasing…, Comparative Analysis of the Family Code and Code of…, Planned Parenthood of Southeastern Pennsylvania v. Casey. In that way, the goal of R. A. Because of this, the study will be able to give comparison as to the success of other deregulation laws. Then, it would bring about a free interaction of market forces that would eventually lead to hindrance of fair competition in the market. Sch. His decision was supported by the DOE and DOF because of two reasons: (1) the prices of crude oil and petroleum products in the world market are beginning to be stable and on a downtrend since January 1998; and (2) the exchange rate of the peso in relation to the US dollar has been stable for the past three months, averaging at around P40. 2003-05-006 Since 1985, it was required to keep 115 days of supply. Coverage These rules shall apply to all persons or entities engaged in any, a combination of, or all activities or business of the downstream oil industry, such as importing, exporting, re-exporting, shipping, transporting, processing, refining, The years that passed for Philippine deregulation of the oil industry has its own successes and failures. Republic Act 8479 will be compared to deregulation laws in other countries. From … Garcia states that the provided duration is too short, making it hard for new comers, and the market will still dominated by the big three, making it unconstitutional because there’s still monopoly/oligopoly. ”6 The Supreme Court points out that the act does not make a truly competitive market because of the 4% difference on the tax imposition on existing businesses versus new comers. II. 64 per liter. Also, consumer welfare is not guaranteed for monopolistic practices produce abusive price controls and inefficient production. For he claims that Sec. 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. However, what must be clear is that the government must not remain doing nothing, or at least refrain from giving the public an impression of inaction to the concerns of the oil industry. For the first part of this series, read here. 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. website. The Philippines has removed the majority of all consumer energy subsidies, successfully phasing out price subsidies in the late 1990s as a result of wider structural reform to deregulate both the downstream oil and electricity sectors, including the removal of the country’s Oil Price Stabilization Fund and privatization of the National Power Corporation. 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. The OIC can fix prices of petroleum products, control … And therefore, the law was processed unconstitutionally for being foul and disparaging infringement of the constitutional policy and command embodied in Article XII, Section 19 of the 1987 constitution against monopolies and combinations in restraint of trade. With Sec. Third, the law will sire an even more powerful oligopoly whose power to the market will take advantage of the consumers’ general welfare. However, in 2008 the reserve was decreased to 64 days of supply. 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. 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. 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. As the main source of the last part, the fairly recent paper entitled “Philippine Oil Deregulation and the Oil Crisis: A Policy Issue Paper” by Marlou Mumar of University of the Philippines. Republic Act (RA) 8479 was passed into law in 1998. House Bill (HB) 255 claimed the inaction of the government, specifically the Department of Energy (DOE), even if faced by such oil price adjustments. Transition from R. A. In this agreement, collusion between companies happen. 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. 17 Discussion of anti-competitive agreements are also given. 16 Sources of market failure are also discussed, which a monopoly can cause. 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. This law aims to expel all government control over the oil industry and is to be done within two phases. The act allowed oil companies to set their own prices. C. Objectives of the Study The objective of the study is to provide a more accurate assessment on the unconstitutionality of the Oil Deregulation Law. Accompanying oil deregulation was the abolishment of the OPSF. 8479. 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. To break the foreigners’ control, with President Marcos’ initiative, the Philippine National Oil Corporation (PNOC). 13 Given these issues, it would seem that the oil deregulation law is unconstitutional, a fact which the paper seeks to determine. Apparently not, as the third part will discuss the different reasons from various persons and groups why RA 8479 is unconstitutional. However, the actualization of the ideals of the framework seems lacking in the reality that most of these industries remain structurally monopolistic or oligopolistic. The last one was the issue on predatory pricing; Congressman Tinge suggested the Arena-Turner test and proposed to redefine predatory pricing. The law seeks to attain “a truly competitive market that runs with fair prices and a suitable supply of environmentally-clean and high quality petroleum products. Caltex, Shell, and PNOC, or Petron, were the only three remaining oil companies in the country came 1985. The oil deregulation law’s goal is part of the framework that the constitution wants to achieve. • December 26, 2011• Open Access• Big Consumers• Energy Regulatory CommissionIn the PhilippinesElectricity DeregulationFin 111 – AY02 19. 8479 is cleared of any constitutional flaws. The literature gave the definition of an oligopolistic market and indications of anti-competitive practices. 22 The petitioner turned his attention to the phases that happened after the approval of the R. A. 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. 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