Filipinos must brace themselves for another wave of fuel excise tax in 2019 as President Rodrigo Duterte approved at a Cabinet meeting last night the recommendation of his economic team to go on with the fuel excise tax increase starting 2019. This is despite the escalating inflation that hit the highest after almost 10 years many years
This decision was made by President Duterte after his discussion with economic managers on the adverse effect of an earlier proposal to shelve the excise tax hike due to rising prices of fuel in the world market in the first three quarters of this year.
Budget Secretary Benjamin Diokno confirmed Duterte’s decision last night and said that.the President us just implementing the law.
Finance Secretary Carlos Dominguez III and Economic Planning Secretary Ernesto Pernia together with Diokno insisted the need on the continuation of the next round of oil tax increase in 2019, citing the drop in world crude prices.
Last week, the Development Budget Coordination Committee (DBCC) said it was no longer pushing for the suspension of petroleum excise tax hike next year due to the downtrend oil price in the world market. Thus, the Finance Chief said that the DBCC recommended that the P2 increase in the excise tax on oil be implemented in January 2109 based on schedule under the second phase of the comprehensive tax reform program.
Dominguez added, “The circumstances have changed drastically because now the price of the oil in global market has gone down.”
“The DBCC, in a special meeting conducted earlier (yesterday), has decided to recommend the continued implementation of the second tranche of excise taxes on petroleum products under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law,” Dominguez added.
“This is not a hasty decision. It was deliberated well and we made our decision based on what the facts,” he said.
On November 14, the Palace approved the initial recommendation of economic managers to suspend the next tranche of increase in petroleum excise tax.
Dominguez said the recommendation to discontinue the suspension was made in light of the “favorable” developments in oil price movement in the international market, as well as easing inflation.
Meanwhile, former interior secretary Mar Roxas said that instead of just suspending the scheduled increase, the government should scrap it altogether as ordinary Filipinos continue to reel from rising cost of basic goods.
Roxas raised his concern by saying that raising excise taxes on fuel is a provision in the TRAIN law that needs to be repealed in the light of skyrocketing prices of basic goods and commodities.
“The economy is our No. 1 priority right now. We cannot leave it to chance. It’s better to repeal this excise tax than just suspend it,” he stressed.
“Increase the tax on fuel and everything increases,” he said.
He also added that administration was obviously using wrong models or assumptions when it declared that the impact of the excise tax hike on ordinary Filipinos would only be minimal.
“That’s the difference of having an economist in position – one who knows what’s really happening in marketplaces. It’s funny how those who voted for TRAIN are now calling for its suspension. That’s not enough because people are going hungry and losing jobs,” he added.
Meanwhile, Presidential Spokesman Salvador Panelo echoed the sentiment shared by Diokno by saying that the decision that was made the President is just a matter of implementation of the law. “Dura lex, sed lex.” (The law is harsh, but that is the law.).