Aquino Trims Oil Price Increases : But Some Transit Workers Defy Union Leaders, Strike

Philippine President Corazon Aquino bowed to widespread labor unrest Tuesday, partially rolling back her recently announced oil-price increases in a move apparently aimed at averting a threatened nationwide transport strike today that many feared would turn violent.

Although leaders of the more moderate labor unions called off the strike early this morning in response to Aquino’s announcement, the rank and file apparently chose not to work, as did members of the more radical unions, whose leaders called Aquino’s rollback insufficient.

As the strike took hold, Manila’s normally heavy rush-hour traffic was light this morning, with no public transportation vehicles visible. The army announced plans to deploy dozens of transport trucks to help bring people to work.

In her nationally televised “emergency” announcement late Tuesday afternoon, Aquino said her government had been forced to raise prices one week ago because higher prices for international crude oil had exhausted a government subsidy fund created to absorb such increases.

However, in the face of unprecedented popular criticism, the president said she subsequently decided to reduce the duty on imported oil to 15% from the earlier announced 20% and help replenish the fund with gambling profits from government-run casinos. As a result, energy officials announced Tuesday, the cost of regular gasoline will drop from $1.49 to $1.35 a gallon.

The price increases had touched off the harshest and most widespread criticism of Aquino’s government since she took power from Ferdinand E. Marcos in February, 1986, culminating in a series of regional strikes throughout the country in the past week.

In her prepared speech, Aquino made no mention of the protest movement, which included a march on her presidential palace last Friday that diverted attention from the country’s commemoration of the fourth anniversary of the assassination of Aquino’s husband.

Led by the powerful May First Movement--a leftist labor alliance that claims 700,000 members nationwide--transport workers, bus drivers, taxi owners and students planned today’s strike in a further effort to force Aquino to roll back the price increases.

After Aquino’s speech, some moderate union leaders said they would not participate in the strike, but the May First leadership said it would go on as planned.

Members of the newly elected national Congress were among those who had protested the price increases, and several bills were filed calling for an investigation into Aquino’s decision. In addition, most economic experts said the higher prices would trigger across-the-board inflation.

Prominent political analyst Amando Doronila said in a front-page editorial in the Manila Chronicle on Tuesday that the oil-price controversy “confronts the government of President Aquino with the most volatile challenge affecting its popularity since it took office 17 months ago.”

World Oil Price Change

Aquino insisted in her Tuesday speech that her government was not “shirking our duty to do what must be done for the stability of our economy and society.”

In addition to her “painful” decision to divert gambling profits from the government’s six casinos, which had been earmarked for social welfare projects for the poor, Aquino said her rollback of the oil prices was based on “a reversal in the upward movement of the crude prices” internationally.

“If the situation takes a turn for the worse again, we shall consider another increase in petroleum prices. . . , “ she went on. “We must roll with the punches delivered by the developments abroad, even as we carry the burden of debt which we inherited.”

The Philippine government owes more than $28 billion to foreign banks, most of it on loans incurred during the 20-year Marcos regime. The country’s annual per-capita income has slipped to just $625.