I have had Tuesday volatility exhaustion for quite a while now. It’s a disease borne out of an alphanumeric that reads RA 8479, which, in plain language, is merely the Downstream Oil Industry Deregulation Act of 1998. “Merely,” of course, is doing a heroic amount of work. I’ve had it in all its forms—mild, severe, and escalating—such that if someone offered me a pill, I would gladly take it, basta. Preferably before the next price advisory. People have argued over it, for and against, and yes, the arguments have been mild, severe, and, I admit, insulting. Apparently, even the debate comes with its own price escalation. This is fueled mostly by distrust of oil companies over transparency and by the speed and asymmetry of price changes. You hear the complaints on radio and television and see them in your social media feeds: global oil prices spike and local increases arrive practically wearing running shoes; prices fall and the rollback suddenly remembers it has paperwork. Aba, makukunat! Upward, express delivery. Downward, please allow several business days.
Some of the absurd proposals include complete state price-fixing by executive order, with Malacañang being asked to ignore economics and cap adjustments by decree. As though the international oil market were simply waiting for a firmly worded memo. Naku naman. There have been proposals to nationalize the entire downstream sector and to ban price increases during calamities and geopolitical crises. A comforting notion, assuming the cost of imported oil can be persuaded to observe our preferred calendar. Then came the suggestion to resurrect the OPSF, the oil-price buffer fund established in 1984: oil companies paid into it when prices were low and drew from it when prices surged, keeping the dang thing stable. In theory, lovely. In practice, somebody still has to pay. Whether as motorists or passengers, we have come to expect the relentless cycle of adjustments—52 times a year, every Tuesday. This has bred skepticism that deregulation fosters true market competition. The suspicion of cartel-like shadow behavior among oil firms hangs over some of us; it is a suspicion, not something a shared Tuesday schedule alone proves. Still, teka lang—competition ought to look competitive. Calls for a return to state-buffered pricing follow, as reliably as Tuesday itself.
I do not believe the OPSF will be back. The few times I was told, as a youngish reporter in the 1990s, to talk to the men at the old Philcomcen building along Ortigas Avenue and get the story, I hardly appreciated the math behind each decision. I could gather the quotes; the arithmetic was another interview altogether. Only later, while covering public finance stories, did I understand the numbers in the aggregate. What looked like relief at the pump could become a headache at the Treasury. I remember how the fiscal sector—the national government—was perennially in deficit and how the International Monetary Fund kept a close eye on the fund as a condition for a loan. There was no bottomless wallet, however reassuring the arrangement sounded. At its worst, then-Central Bank of the Philippines governor Gabriel C. Singson spoke of foreign currency reserves of only $200 million. As I remember it, the question was whether to buy the oil needed by power-generation companies to keep factories operating or buy formula milk to feed millions of hungry newborns. That was not a choice anyone should have to make. The comforting word “stability” looked rather less comforting beside that arithmetic.
So, no to a fund that, on the whole, favors higher-income groups who own multiple cars rather than the poor who travel by public transport. Aba naman—if public money is buying relief, surely it should not take its cue from the size of somebody’s garage. No to a fund bailed out using tax revenues, diverting critically needed money from health, education, and infrastructure.
The bill does not disappear because it has stopped appearing at the pump; it merely changes address.
Some may want to repeal the alphanumeric anomaly altogether, but I do not believe Congress has the legislative consensus to do so. Let us have targeted subsidy programs instead, imperfect though they might be, for public utility vehicles. Let us strengthen the Department of Energy’s capacity to monitor oil prices rather than resort to direct market intervention. That means better scrutiny, not an invitation to wave every price advisory through. I still want relief from Tuesday volatility exhaustion. I simply do not want the cure charged to a hospital, a classroom, or a road we already cannot afford to neglect. Sus naman—a cheaper-looking Tuesday is not much of a bargain if we spend the rest of the week paying for it.
The Pedantic is a weekly commentary by Jun Vallecera, editor of Context.ph, sometime cat father to 12 puspins, and a 38-year veteran of watching the Philippine economy misbehave. He does his own laundry, which may explain his continued employment at home, and occasionally wonders why his wife has not left him yet. His views are entirely his own, although he remains unconvinced that anyone is keeping score.
