MANILA, Philippines ? The Management Association of the Philippines (MAP) Thursday called on the government to discard its order requiring oil companies to freeze fuel prices, saying this could ?distort supply patterns.?

For its part, the Philippine Chamber of Commerce and Industry (PCCI), saying that the importance of oil products to the economy must be considered, warned the government to be careful in implementing the price freeze order.

?While it is widely popular with a consuming public that is reeling from the effects of the global crisis and the recent typhoons, the order is based on an oversimplified but misleading view of the problem,? MAP said in a statement.

Executive Order No. 839, issued by President Gloria Macapagal-Arroyo Friday last week, ordered all oil companies to bring down the prices of petroleum products to their Oct. 15 levels.

The order freezing oil prices will last while the state of calamity the President had declared ?in the entire Luzon? is in effect. Ms Arroyo issued the order on Oct. 23 in the wake of the storms that devastated large swaths of Luzon, including Metro Manila.

PCCI, the country?s biggest business group, said in a statement ?EO 839 may be an exercise by government of its police powers in an emergency situation, but it is expected to employ it judiciously, sparingly and in a well-calibrated manner, and not a day longer.?

?Indisputably, oil is a strategic product that has great impact on our economic well-being and national security. The general welfare of our country and our people must not be put at risk by any miscalculation of the impact of EO 839 on the stability of our oil supply,? it added.

But an unfazed Justice Secretary Agnes Devanadera dismissed warnings that a shortage in the oil supply would be the result of Malacanang?s price freeze order and urged the consuming public and the media to report gasoline stations that ignored the order.

?Let?s not make it hard?

?Let?s not make it hard on ourselves, let?s not go into intimidation. If there would be a supply shortage, the government has many options under the oil deregulation law. We can always go into inquiry, investigation or opening of books. We can take cognizance of supply and world market prices,? she told reporters Thursday.

In opposing the order, MAP said, ?It holds out the promise of lower prices but it does not properly inform the public of the dire consequences of arbitrary and sweeping price control.?

It added that, from a legal point of view, the ?constitutionality of the order is at best debatable.?

?Experience has shown that price control distorts supply patterns. This order will not be an exception. The unavoidable response of a company that is forced to sell at below cost is that it has to cut its business volume to minimize losses. As the entire chain inevitably gets scaled down, supply gradually disappears,? MAP explained.

As a result, it said, buyers would be forced to turn to informal sources, paving the way for a black market to emerge.

?In the end, the objective of keeping prices low is defeated. Restoring normalcy to the market is then a protracted and painful process,? it said.

PCCI said the government and the oil industry should ?sit down and agree to work together, in the spirit of true partnership, to respond to the crisis of the twin disasters of Tropical Storms ?Ondoy? and ?Pepeng? while ensuring to protect and preserve the principles of free enterprise.?

The group noted that while oil was considered a basic commodity, its price and supply levels were difficult to predict, as the product was almost entirely imported.