Japanese firms are also very active in investing in biofuels; conglomerate Marubeni was reported as among the companies in exploratory stage of venturing into ethanol projects. For coco-biodiesel production, Toyo Engineering Corporation (TEC) intends to develop 600,000 hectares of coconut lands with an investment range of P0.10 to P1 million per hectare.
Most recently, Filipino and Chinese companies recently forged memorandums of agreement to develop bioethanol plants.
All these pave the way for the foreign control over the countrys natural resources, like what has been prevailing in the oil industry. In fact, past Philippine governments have systematically placed the countrys energy resources in the hands of foreign business interests, at the expense of Filipino consumers and the national economy. Examples include former president Marcos integrated energy program in the 1970s and the Ramos governments program to liberalize the local energy sector.
Governments have failed to exert substantial control over the countrys energy resources because of the foreign firms tight grip over the sector. One result of this is the endless rounds of oil price hikes that local consumers continue to suffer from.
Although local oil firms are quick to blame high global oil prices for the hikes, in fact exorbitant and unreasonable oil prices may be traced to the global cartel of the largest transnational corporations that manipulate international prices and domestic pump prices through transfer pricing.
Minimal Effects on Pump Prices
It should also be noted that the Biofuels Act by itself will not have any consequential impact on high and escalating local pump prices.
During the Senate deliberation on the biofuels bill, Energy Secretary Raphael Lotilla admitted that even a mandatory 10% biodiesel blend with regular diesel may result in a price reduction of only P0.50 per liter– already a small amount that may even be easily offset by frequent oil price hikes under deregulation.
DOE projects that the full implementation of the 10% bioethanol program would displace 536 million liters of imported gasoline (which is equivalent to around P15.33 million in foreign exchange savings) while a 5% biodiesel blend would reduce diesel importation by 271 million liters per year (worth around P5.99 billion).
These amounts become insignificant when the high volume of gasoline and diesel imports and increasing global prices are considered. Based on 2005 import figures, this would displace only some 34% of gasoline and 10% of diesel importation.
Nationalize the Industry
The commanding position oil TNCs enjoy in the local oil industry enables them to dictate not only the prices of petroleum products but also the exploitation and control of the countrys oil reserves and other energy resources. And such will also happen to biofuels if government allows the nascent sector to fall under the monopoly control of transnational corporations.
Biofuels development is taking place in the context of a privatized and profit-oriented energy sector. However effective and responsible state control of the energy sector is the only way to ensure that the national interest is protected and that the development of energy resources is integrated with the thrusts and priorities of economic development. Otherwise, as is happening today, the legitimate need to develop alternative energy sources with an eye towards energy independence will be exploited as just another profit-making venture by big private interests.
Real public ownership, control and regulation of the countrys energy sector are vital for this to be truly oriented towards the needs of Filipino consumers. This includes responsible state control over resources such as biofuels. This underscores yet another challenge: to ensure that the government in place is one that is fully and genuinely accountable to the people. IBON Features
