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By Darwin G. Amojelar, Reporter
Surging oil prices could reverse gains in
eradicating poverty in the Philippines, and if oil reaches $200 a
barrel—as some are predicting—even the most affluent Filipino
families are vulnerable.
Poor Filipinos have been switching to
environmentally cleaner fuels, like liquefied petroleum gas (LPG),
that is also essential to eradicating poverty. These families were
weaned from using non-conventional types of fuels, like wood,
charcoal and biomass residue.
Data from the National Statistics Office showed
that the number of households using fuel wood or firewood declined
from 63.5 percent to 55.3 percent. Charcoal users declined from 38.5
percent to 34.2 percent. Those using biomass residues decreased
the most, from 29.2 percent to 18.9 percent.
The trend reflected the increased accessibility
of supply of petroleum products, such as LPG and kerosene, under
oil-deregulated conditions, according to the National Statistics
Office.
From 1995 to 2004, the number of LPG household
users doubled, from 4.2 million to 8.6 million.
The shift, however, means poor Filipinos now
need to spend more to meet their fuel requirements for cooking and
transportation.
In a media presentation, acting Socioeconomic
Planning Secretary Augusto Santos said the increase in oil price
would primarily affect expenditures on fuel, transportation cost,
and other household expenses, in general.
“Considering a baseline oil price of $90 per
barrel and no change in average family income since 2006, families
in the first to third deciles would register negative average family
savings,” Santos said.
Families belonging to the first decile are the
poorest 10 percent, while the wealthiest belong to the 10th decile.
Based on a simulation by the National Economic
and Development Authority, the families under the first decile would
have a deficit average family savings of P3,106, while the second
and third deciles would have negative impact of P1,574 and P280,
respectively.
From May 1 to 15, the Department of Energy said
the average price of the regional benchmark Dubai crude and imported
diesel rose above $91.70 per barrel and $113.00 per barrel,
respectively.
In addition, as of May 21, the prevailing price
in Metro Manila for diesel ranged from P41.67 to P43.97; gasoline,
P49.33 to P51.57; kerosene, P46.15 to P49.30; an 11-kilogram LPG
cylinder, P575.50 to P627.25.
If oil prices increase to $115 a barrel, Santos
said the average household expenditures of those in the
lowest-income decile will increase by P1,789. ”At this price,
families in the fourth decile would now also register negative
average family savings, since expenditures would increase by
P3,970.”
At $125 per barrel, families in the first decile
would increase expenditure by P1,852; second decile, P2,744; third
decile, P3,435; fourth decile, P4,134; and fifth decile, P5,000. The
families under ninth and 10th deciles would have additional
expenditure of P12,744 and P23,786.
In an event that the price of Dubai crude
reaches $180 per barrel, the additional expenditure for households
in the first decile is P2,154; second decile, P3,204; third decile,
P4,038; fourth decile, P5,191; and fifth decile, P6,336.
For the 10th decile, the average additional
expenditure is P27,919.
At the $200 Dubai oil price level, the sixth
income decile is now vulnerable to experiencing deficit. The average
family annual expenditure is expected to increase by P7,765.
For those families in the first-decile bracket,
a $200 a barrel would mean an additional expenditure of P2,269;
second decile, P3,380; third decile, P4,268; fourth decile, P5,191;
and fifth decile, P6,336.
For families in seventh decile, the impact is
P9,646. Those in the eighth decile, P12,114; ninth decile, P16,131;
and 10th decile, P29,493.
A study released by the United Nations in
October showed that over the last three years, households in the
region—including the Philippines—are paying, on average, 171
percent more for cooking fuels, 120 percent more for transportation,
67 percent more for electricity, and 55 percent more for lighting
fuels than two years ago.
“On the whole, rising oil prices have left the
poor with few choices other than to cut back on their consumption of
oil products or make other cuts in their household budgets,”
according to a UN study.
The study added that raising the poor’s
consumption of modern fuels—including oil-based ones like
kerosene, diesel and LPG—and electricity is essential to eradicate
poverty.
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