00:00At kung naipo ng balitang niya, makakausap po natin si Mr. Andrew Jeffries,
00:05country director of ADB Philippines. Sir, good morning.
00:08This is Audrey Goriseta from Rising Shine, Pilipinas.
00:13Yes, sir. Director, your April report notes that the Philippines implemented policies
00:19in seven out of eight response categories, nearly full sweep.
00:24Only India joined us in diversifying fuel sources.
00:28What specifically did the Philippine government do differently or faster
00:33than its regional neighbors to earn this comprehensive rating?
00:40You know, this crisis, as we know, has affected the Philippines considerably
00:46as it has a number of other countries.
00:50The Philippines was one of the first countries to declare a national emergency
00:56due to the situation.
00:59And so, you know, as you mentioned, it's almost a clean sweep of what the administration
01:08has done and put in place to deal with the, you know, vulnerability to the economy
01:15from the rising fuel prices, which has the potential to spill over
01:19and cause more general inflation and more of a drag on the economy.
01:26Well, Director, the ADB report highlights the APLIF program under Executive Order 110.
01:34From a development bank's perspective, how crucial was the whole-of-government approach
01:40in preventing the kind of economic paralysis we've seen in other oil-importing nations?
01:48I think the very early action in taking this very serious was very commendable.
01:54It's a challenging situation.
01:56This is an external shock.
01:58It's not caused by any internal forces.
02:02And the tools the government can use to address this shock, they've utilized it as widely as they can.
02:11They've, you know, Executive Order 114 eliminated the excise tax on LPG and kerosene,
02:20which, you know, affects a lot of households, including vulnerable households.
02:24They've fallen, they've deliberately not extended that to other fuel subsidies,
02:32because this is a balancing act and a trade-off between maintaining government finances
02:39and maintaining government debt levels, but also trying to alleviate the pain to the vulnerable groups
02:47and to the economy.
02:48They've also worked very commendably to, you know, the DOE, for example,
02:54with fuel companies on staggered price adjustments and, you know,
03:00indicative pricing ranges to prevent gouging.
03:03And the diplomatic work, you know, negotiating with Iran as a neutral country
03:09for tankers to go through the Straits of Hormuz, diversifying fuel sources.
03:15They've really done a very wide array of activities to just address this external shock.
03:22Well, Director, the ADB recommends allowing price signals to work while protecting the vulnerable.
03:30We saw the DSWD and DOT are roll out diesel discounts and service contracting.
03:35Does the ADB view these specific subsidies as sustainable
03:40if the Middle East conflict remains as a long-term volatility factor?
03:48Yeah, and it's a trade-off, you know,
03:51and I think the government's been very prudent on how they've handled this.
03:55The subsidies in place are targeted,
03:59and they're two of the most vulnerable people affected by this crisis,
04:07transport drivers, fisher folk, and some others.
04:11And so, and they've, you know,
04:13fallen short of extending those subsidies to a wider group
04:20for the very means of preserving the ability to keep the targeted subsidies longer
04:26in case this crisis keeps dragging on and on and further affects vulnerable people.
04:32Well, Director, you've cited the prevention of fare hikes as a win.
04:37How does the ADB balance the need for fiscal prudence,
04:40saving government money,
04:42with the need to keep public transport affordable
04:44for the millions of Filipino commuters?
04:49Yeah, well, again, that's the challenge faced by the government.
04:53You know, in the short term, you know,
04:56targeted support for the most effective and the affected
05:00and the transport drivers seems to have helped.
05:05And, you know, in the longer term,
05:08the government, including with assistance from the ADB,
05:11is investing in very large public transport modernization projects
05:18that over time will, A, reduce dependence on diesel fuel
05:23and some of the existing transport
05:25and make transport more efficient and more affordable.
05:29But that's a kind of not an immediate emergency response.
05:33That's the longer term fix and solution.
05:35Director, President Marcos Jr.
05:37declared a state of national energy emergency to mitigate this crisis.
05:43In the ADB's view, how much of our current stability
05:48is due to temporary emergency measures
05:50versus genuine structural changes in our energy diversification?
05:58The government's done everything that's possible for the short term,
06:03you know, negotiating, diversifying sources of imports.
06:07Again, you know, negotiating with Iran,
06:11trying to curb demand through, you know,
06:15work-home arrangements and saving on transport.
06:19But also, you know, this started well before the crisis.
06:23You know, the Philippines has been a leader
06:26in promoting renewable energy and the auction process
06:29and the sophisticated companies willing to invest
06:33large sums in renewable energy projects in the Philippines
06:38will, over time, again, be part of the longer-term solution
06:42to this energy diversification matter.
06:45Well, Director, the ADB report mentions
06:47the acceleration of renewable energy projects
06:51as key supply-side action.
06:53Is the Philippines moving fast enough
06:56to ensure that the next global oil shock
06:58won't require another emergency declaration?
07:04You know, building large infrastructure takes time.
07:10And the auction process put in place
07:14makes sure that competition keeps prices
07:19as low as possible for the Philippine consumer.
07:23So, again, it's renewable energy will grow over time.
07:29It's part of the solution.
07:31It's not the only solution.
07:33The government's also looking at other diversified fuel sources,
07:37such as nuclear, for example,
07:40but that's in its early stages.
07:43So, I think the way to look at this is
07:47they're doing what they can for the short term
07:49with diversifying existing supply and curbing demand,
07:54and they're doing what's possible in the medium and longer term
07:57by promoting private investment
07:59in diversified energy sources,
08:01including renewable energy.
08:03So, over time, the vulnerability of the Philippines
08:08as a very high percentage of its fossil fuels
08:11come from the Middle East region,
08:14that should dissipate over time.
08:16Well, Director Jeffries, the report highlights
08:19the $110 per liter diesel discount for drivers.
08:25From your data, how significant was this
08:28in preventing a domino effect on food prices
08:31and basic goods for the average Filipino families?
08:37You know, there is a worrisome increase in inflation generally,
08:44which is, you know, that's not just a Philippine problem,
08:47that's a global problem because of this crisis.
08:50You know, for example, imported fertilizer is, you know,
08:56has risen about 60% in cost in its planting season.
09:00So, there's a number of concerns on the price increase area
09:05and, you know, food prices, you know, part of food prices
09:11is the transport cost to get those vegetables and meat
09:15and other foods to market.
09:17And as those prices increase,
09:20the concern is that spills over
09:22into more general inflation increase.
09:25Again, this is an externally created shock
09:28and the government's doing what it can,
09:31including, you know, a recent BSP rate increase,
09:37a modest one, to try to, you know,
09:42stay ahead a little bit of the inflation.
09:44Director, the ADB often advocates
09:48for targeted cash transfers over broad subsidies.
09:52Why does the ADB consider the DSWD's involvement
09:56in a fuel crisis traditionally an energy
10:00or transport issue to be a best practice for other nations?
10:06You know, we at the ADB work very closely with them
10:11on the Walangutom project, you know,
10:14which, and some of our funding helps support
10:18750,000 highly vulnerable households
10:21through conditional cash transfers.
10:24So, that was based on a pilot project
10:28and then significantly scaled up.
10:32And what's been learned from all of that
10:35is how to use digitalization and data
10:39to make sure that support is targeted
10:44in reaching the right recipients.
10:47And so, it's the most efficient cost-wise
10:50for the Filipino taxpayer.
10:52And it helps address the most vulnerable,
10:55which, again, keeps them working and viable
11:00and part of the economy
11:02and part of the consumption of the general public,
11:05which is, you know,
11:06a big part of the Philippine economy.
11:09Again, thank you.
11:10And good morning, Mr. Andrew Jeffries,
11:12country director of ADB Philippines.
11:14prime minister of ADB Philippines,
11:15two different offerings,
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