It was recently headlined that Pilipinas Shell is liable to pay more than 1 Billion pesos worth of excise tax because of its importation of Alkylates. These Alkylates were marked as a raw material that is why it is exempted from excise tax. But a tax collector found out that these alkylates have 94 Octane rating and concluded it as fuel. Therefore, it is subject to excise tax.

Okay, as a person that has exposure in both chemicals and law, I will make a commentary on this issue.

The smart questions to ask:
-Why did the Tax Collector think that Alkylates are fuel?
-Is it really a raw material?

First let us check why the Alkylates being a raw material was not subjected to excise tax upon importation. This is explicitly stated in the Tax Reform Act of 1997. Section 109.

The following shall be exempt from the value-added tax:
F) Sale or importation of raw materials to be used by the buyer or importer himself in the manufacture of petroleum products subject to excise tax, except lubricating oil, processed gas, grease, wax and petrolatum;

Since Pilipinas Shell declared the Alkylates as raw materials, it is clear that it should not be subject to excise tax because of the provision above. Actually, the government will still receive its excise tax after the end product is produced. Examine the words ...in the manufacture of petroleum products subject to excise tax... So, after the use of the Alkylates in the manufacturing process of gasoline, it will then be subject to tax.

Now let us answer the question, Why did they think that this is a fuel?

According to the news, the tax collector found out that Alkylates have 94 Octane Rating and had considered it as fuel afterwards.

First, let me just define what Alkylates are. Alkylates are organic compounds that are rich in isooctane. Isooctane, in general, is a significant factor in identifying a fuel's Octane Rating or Anti-Knock Index (AKI). The AKI as defined in the Clean Air Act of 1999:

...means the rating of the anti-knock characteristics of a grade or type of automotive gasoline as determined by dividing by two (2) the sum of Research Octane number (RON), plus the motor Octane Number (MON); the octane requirement, with respect to automotive gasoline for the use in a motor vehicle or a class tehreof, whether imported, manufactured, or assembled by a manufacturer, shall refer to the minimum octane rating of such automotive gasoline which the manufacturer recommends for the efficient operation of such motor vehicle, or substantial portion of such class, without knocking.

In other words, Octane Rating is the point system that rates the tendency of a gasoline to induce knocking in an engine. A lower Octane Rating will yield a higher probability of knocking. Knocking, in the general sense, is the literal knocking sound that you hear in an engine. This happens because of the pre-mature self-ignition of the fuel in piston before the optimum position in the piston cycle.

There are two parts in the piston cycle: compression and expansion. Compresison is when the piston starts to go up, thereby compressing the fuel injected in the engine. Expansion is when the piston goes down, giving space for the gases to expand. The time for ignition of the fuel is after the compression but preceding the expansion. Knocking occurs when the ignition of the fuel happens during the compression cycle.

Now, we will finally answer the question, Is it really a raw material?

Answer: Yes.

For a product to be considered as an end product or consumer product, it should be useful it its current form without the need for anymore process. In other words, after you buy a product and immediately use it for its intended purpose then it is an end product. On the other hand, raw materials are the one's that need to undergo processes first before it can be used by the consumer.

Alkylates is used as a blending component of gasoline because it provides the anti-knocking properties that will make the gasoline blend saleable. By law, there is a minimum amount of octane rating before gasoline can be sold as stated in Section 26-a of The Clean Air Act of 1999 that declares:

...no person shall manufacture, import, sell, supply, offer of sale, dispense, transport or introduce into commerce unleaded premium gasoline fuel which has an anti-knock index (AKI) of not less that 87.5...

Since Alkylates is full of isoocatane; And isooctane is identified to posses a high anti-knock property; it is thus used as a blending component in gasoline. Before, they use Tetraethyl lead as additive for its anti-knock property. But since the identification of the hazardous effect of lead in humans, it has been phased out. Hence, we now use UNLEADED gasoline.

We don't actually need to get technical on this. If it is an end product, they should be selling it to the market without further processing. Let me ask you, have you ever seen a Shell Station with ALKYLATES with its price displayed in the price signage?

...

In my point of view, Pilipinas Shell did not do anything wrong. Alkylates are really used as a raw material in gasoline blending which will be later be subject to excise tax.

The most logical reason that I can think of that led to the misconception of Alkyaltes as end product fuel is the hastiness to conclude that it is a petrochemical fuel because of having the high AKI of 94 as said so in the report. I would suggest that we educate our tax collectors of such technical facts or even asking sister government agencies such as the DOE and the DOST before making decisions on this matter. It's like the scandal in both the engineering field and the commercial sector for accusing a very large corporation of not paying the proper taxes. If this happens again, I'm sure it will have a detrimental effect in our economy.

I was surfing the Teevoh for something to watch when I switched to TV5’s news channel. Dokumentado program was airing. Hmmp.. So apparently, the debate about the RH Bill in the Senate is already on. And on the podium for Pro RH Bill is the author and prime defender of the bill, Senator Miriam Defensor-Santiago while for the Anti, it’s Senator Tito Sotto.

My goodness! I am appalled by Senator Sotto’s questions and counter arguments. It’s beyond close-mindedness and reason. I can’t believe I voted for such a… ulk!

He questioned Senator Santiago’s source of data. She stated that it was from the National Statistics office, a government agency. The data I’m talking about is that 11 women die every day from child birth. OMFG! If I were Senator Santiago I would be pissed and extremely insulted by such a remark! He dared question the integrity of Senator Santiago’s research? A Doctor of Law? A UP Law Professor? A candidate to become an Inquisitor in the International law? Eff!

This was not the 1st time my right brow reached its apex. He said something like: “wag tayong magmarunong sa Dyos.” (not so accurate). But in essence he’s implying that the RH Bill will disrupt the balance that the Lord has given us. That the Lord will not create something that can’t be sustained.

Eto Senator Sotto, tatagalugin ko na para maintindihan mo ang point ko. Hindi ko maintindihan ang point mo. Don’t give me this shit na wag marunong sa Dyos. Pag isipan mo tong sasabihin ko. Bakit may global efforts to save the environment? Hindi ba gawa din ng Dyos ang mundong ito? Bakit kelangan pa nating gumawa ng international treaties at national laws para lang masustain ang nanganganib nating environment? Sa logic mo hindi ba pagmamarunong na yan sa Dyos? Kasi sa logic mo, kayang magsustain ng mga ginawa ng Dyos kasi it’s all part of the grand design. Kaya sabihin mo saken ang dahilan kung baket kelangan nating gumawa ng sobra sobrang efforts para lang mailigtas ang environment kung kaya naman pala nyang magsustain in itself kasi gawa ito ng Dyos?

What really irked me the most was the statement that the RH Bill is just for the money. Good thing Senator Santiago is tact. I agree with her that it’s unfair. Corruption is out of context in this issue. I remembered Manong’s counter statement for this (Well, all of us are Pro RH Bill, except for Av, an altar server). He said, ”Hindi maganda yung logic na yan, para mong sinabing wag ka nang matulog kasi alam mong gigising ka din naman”. The debate for the RH Bill should remain in context with the RH Bill. Corruption is another issue which is deeply rooted in our political system. You can counter every bill with this corruption stance because all of you sitting in the Senate are all there because of the political mechanism called an election. Then, there won’t be any laws that will be passed because of this crude philosophy.

Haaaaay!!! Why do we have *toot* in the Senate?! Haru! No wonder our country is not moving forward. We’re still plagued by conservatives. I mean, being conservative is good but in excess, it’s really a pain in the ass. Like the excess population that we have today.

Hmmmp… I somehow find it ironic that economists are Anti-RH Bill. Well according to monster from one of our intelligent conversations about the issue: less people, less productivity. Well in my point of view that is true in an ideal setting. But what I learned in engineering, there is no such thing as ideal. We should always look at the REAL situation. But anyway, I’m not an expert in the economics point of view so I’ll try to talk to my new anakiz who is a macro- and political economist about this issue. It’s better than talking to just a high school economics teacher. Ay! Bumabanat! Wahhahahahah!!!

If you heard someone say, "EFF THIS COP!!! GRRR!!!", you might be near where I was reading this book by my favorite author, John Grisham. This book tells the story of Ron Williamson as he was convicted guilty of a crime he didnt commit. Along with Dennis Fritz, they were sentenced death penalty by Lethal Injection.

I find it very wrath worthy that the authorities, who should be protecting its people, are the ones fabricating evidence to incriminate they're own. I can't believe that science was used in such way. Absurd! It is just absurd! Fooling everyone and even trying to salvage themselves from shame by not taking the blame! Goodness, I can't believe such a person exists. But thank God that this is already in the past, and that science has prevailed more in the field of Forensics and it didn't stop only to the faulty hair science. Good thing that there are people who are there to uphold the law, and that each person must given his/her fair share of justice.

Reading this book made me worry of the injustice in our country. Here where the rich and full pocketed rules, I that this kind of story can be traced here as well. good thing though that death penalty is not recognized here anymore. But I am sure the innocents are somewhere there and are rotting in their cells.

This book is a good read. It made me realize that there is really injustice in this world. That not all in power intends to be good for the society. I hope to be a lawyer to someday so that I may fight to the battleground for the weak the oppressed and the powerful.

PHILIPPINES: Anti-Vagrancy Law

(Women's Feature Service/January 20, 2006)

DAVAO CITY -- On the night of November 14, 2003, Mary
Salsaba was with her friend Norma waiting for a
jeepney ride along downtown San Pedro Street here when
suddenly a police car screeched to a stop. To their
surprise, a policeman approached them and, without
word, forcibly hauled them off to the car and brought
them to jail.

The police arresting Salsaba later explained in an
affidavit that they were conducting routine
surveillance when they spotted Salsaba and her
companion. Because they were observed “as loitering or
wandering around the said street corner without any
lawful purpose despite their physical capacity to
work”, Plaza arrested them on the ground of
“vagrancy,” a crime publishable under Art. 202 of the
Revised Penal Code.

Recently, the case of People v. Salsaba has gained
prominence as a test case after women’s groups
questioned the constitutionality of Article 202. The
case is now pending before the Supreme Court after the
Regional Trial Court in Davao City declared the
anti-vagrancy provision as unconstitutional.

Article 202 which is entitled “vagrants and
prostitutes” states that a vagrant is “any person
having no apparent means of subsistence, who has the
physical ability to work and who neglects to apply
himself or herself to some lawful calling; and any
person found loitering about public or semi-public
buildings or places or trampling or wandering about
the country or the streets without visible means of
support.”

Prostitutes, on the other hand, are defined by Article
202 as “women who, for money or profit, habitually
indulge in sexual intercourse or lascivious conduct.”

These definitions, according to criminal law experts,
is so vague and so broad that these opened the
floodgate to abuse and various interpretations. In the
US, vagrancy laws which are called the “garbage pail
of criminal laws” have targeted not only plain
loiterers and wanderers but also hippies and students.


In the Philippines, women’s groups assail the
provision for being particularly discriminatory
against prostituted women and children who are
imprisoned by the police on grounds of simply “having
no apparent means of subsistence and are found
loitering and wandering in the streets.” In Southern
Mindanao alone, more than 300 cases were filed against
persons considered as vagrants, mostly women and
children from January to June last year.

Lawyer Evalyn Ursua, Salsaba’s counsel and director of
the Women’s Legal Bureau, asserted that the law runs
counter to constitutionally-protected individual
rights, particularly the right to liberty and the
right to free expression. Salsaba, for example,
happened to be lingering in the city streets just
before midnight, for which reason she was sent to
prison for the crime of “vagrancy”.

“Loitering or wandering in public places is an
exercise of one’s freedom of expression. And no person
shall be deprived of such rights freedoms without due
process of law,” Ursua said.

Ursua’s argument was later upheld by the Regional
Trial Court in Davao City which found the provision
also a violation of the “equal protection clause”
guaranteed under the Bill of Rights. The RTC decision
partly states that:

"Loitering about and wandering have become national
pastimes, particularly in these times of recession
where there are many who are without visible means of
support, not by reason of choice but by force of
circumstance as borne out by the high unemployment
rate in the entire country...To authorize law
enforcement authorities to arrest someone for no other
reason than the fact that she cannot find gainful
employment would indeed be adding insult to injury."

Aside from vagrancy charges that could be filed
against those found loitering and wandering without
means of support in this city, children below 15 years
old could also be imprisoned for violating a city
ordinance which imposes a curfew on minors. They are
prohibited from loitering in public places here from
10 pm to 4 am of the following day, unless they are in
the company of their parents or guardians.

“Thus, children find themselves locked up at congested
Philippine National Police (PNP) stations until social
workers from CSSDO conduct their counselling sessions
the next day,” writes Mae Templa in her study entitled
“Understanding Children in Conflict with the Law in
Davao City.”

Legal Assistance for Women
Lawyer Romeo Cabarde, Ursua’s co-counsel, said Article
202 often victimizes the poor thus creating a
situation “where you may be penalized for being
jobless and loitering in the city streets,” he said,
citing Salsaba’s case who is jobless and who happens
to live in a known urban poor area in Davao City.
Cabarde is also the director of the Davao-based Luna
Legal Assistance Center for Women and Children which
so far handles at least four cases of vagrancy,
including the Salsaba case.

Luna, which is a Cebuano term for “space” or “place”,
was formed last year to offer a “refuge or sanctuary
by providing legal assistance to women and children
victims of abuse, neglect, cruelty, exploitation and
discrimination.” The center’s formation was prompted
by requests from women’s groups such as the Bathaluman
Crisis Center and Talikala which are swamped by
clients in need of legal assistance. Majority of these
clients, such as Salsaba, could not afford to hire the
services of a lawyer.

Cabarde also noted the following constraints in
rendering legal assistance: machismo in the judiciary,
dilatory court processes, economic dependence of women
and the welfare of children, lack of shelter for
abused children and security of clients. “The
availability and willingness of volunteer lawyers is
also seen as a problem,” he added, as most of them are
also active legal practitioners.

Today, Luna handles more than 30 cases from violations
of the Anti-Violence Against Women and Children Law
(RA 9262), rape and vagrancy. Cabarde however stressed
that Luna encourages “client participation instead of
dole-out.”

Article 15 of the Convention of the Elimination of All
Forms of Discrimination Against Women (CEDA) states
that “parties shall accord to women equality with men
before the law.” Unless women are ensured of access to
legal assistance, Article 15 is rendered meaningless.

The Philippine government is signatory to CEDAW, the
most comprehensive treaty on women’s rights. CEDAW
came into force in 1981 signed by the Philippines in
the same year. It is the second most widely ratified
international human rights treaty, ratified or acceded
to by 180 governments or state parties. CEDAW is the
only human rights treaty to affirm the reproductive
rights of women.

Implementation of the Convention is monitored by the
CEDAW committee of 23 experts, now chaired by a
Filipino, former Ambassador Rosario Manalo. They
review each country’s compliance every 4 years.
~Source

I stumbled upon this post when I was in Bataan. I was browsing through pages of fellow members of Rainbow Bloggers Philippines, when I read from somewhere about the Anti-Vagrancy Law. Intrigued, I searched more about it and found the article above.

I do think that the Anti-Vagrancy Law lacks the proper identification procedure in which one can say that someone is considered "as loitering or wandering around the street corner without any lawful purpose despite their physical capacity to work". The arrest was done at night so I don't see why the policeman didn't have the brains to think that the persons he arrested were just going home. This is I think a case of abuse of power.

Hindi ba translation ng "loitering and wandering around the street corner" ay tumambay sa kanto? if so, dapat buong street ng Pitong Gatang, arestuhin nila. I agree that the law is unconstitutional because it contradicts with the people's freedom to move about.

On another note, if such law exists, why are there so many beggars in Manila? They are the ones that should be considered vagrants. I think that some of them are just bone idle. I see so many beggars who have the capacity to work but does the opposite. That's why I don't give alms. They are vagrants.