MANILA, Philippines--Malacañang has rejected the call made by the Management Association of the Philippines (MAP) for the lifting of the cap on fuel prices and instead appealed for more understanding of the government?s position.

Press Secretary Cerge Remonde said he agreed with MAP?s contention that Executive Order 839 issued by President Gloria Macapagal-Arroyo imposing a cap on the prices of petroleum products ?wasn?t good for the economy.?

But he appealed to MAP to understand that the order was prompted by the declaration of a state of calamity in Luzon in the aftermath of Tropical Storms ?Ondoy? and ?Pepeng,? and that this would ?only be temporary.?

?We appeal to the social responsibility of our friends in the business community to understand that this order was not issued to put them out of business,? Remonde said at a briefing.

MAP had urged Malacañang to discard the EO, warning that it would ?distort supply patterns.?

Even the Bangko Sentral ng Pilipinas has warned against the imposition of any form of price control, saying that it would create market distortions and disrupt oil supplies in the long run.

The Philippine Chamber of Commerce and Industry (PCCI) had also aired its reservations.

Long-term supply contracts

The influential business group urged the government to employ the order ?judiciously, sparingly and in a well-calibrated manner, and not a day longer.?

At the same time, Remonde scoffed at threats by the oil companies not to import fuel.

?We all know that these oil companies have entered into long-term supply contracts. And they can?t scrap these just because they disagree with the cap on oil prices,? he said, warning that if they made good on their threat it would constitute economic sabotage.

?I think the government is going to act with equal determination as it is doing now in order to protect the interest of the greater number of people,? he said.
?Firms should open books?
Malacañang said it was not buying the argument of the oil firms that they stood to lose money if the price ceiling on oil prices was not lifted soon.

Gary Olivar, deputy presidential spokesperson, said EO 839 should in fact compel oil companies to open their records to audit, if only to prove their claim that the presidential order was bad for their business.

Olivar said the oil firms should not ?hide behind the protection of deregulation as provided for by the law and at the same time seek public sympathy.?

?You do have to play your part. Be transparent, be open. Most of all, be compliant with what the government requires if it is within the power of government to do this,? he said.

Oil firms have reluctantly followed President Arroyo?s order to bring their prices back to Oct. 15 levels. They warned of a supply shortage because they could not logically import oil then sell it at a lower price.

?We don?t take that against them, but we would remind them that if they complain about profitability issues, they should have agreed before to open their financial statements and books to proper audit,? Olivar said. With a report from Christian V. Esguerra