The Presidents Economic team in Bali with DFA Secretary Alan Cayetano, SAP Bong Go, Finance Secretary Carlos Dominguez and Budget Secretary Benjamin Diokno
MANILA — President Rodrigo R. Duterte is set to announce his decision on the temporary suspension of the scheduled oil excise tax hike for 2019, as price of oil in the international market is projected to remain at USD80 per barrel level in the coming months.
“Today’s price and multiple estimates of crude prices over the next two months show that the average price will stay above the USD 80 threshold, and it is therefore being announced early that the suspension mechanism will be activated,” Finance Assistant Secretary Tony Lambino said in a statement on Sunday.
Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, suspension of excise tax levied on petroleum products may be suspended in 2019 if global crude prices average USD80 per barrel in the last quarter of this year.
Lambino said the President’s would-be declaration, as announced by Special Assistant to the President Bong Go, “is being made two months before the time required by law, to proactively anchor inflation expectations and enhance the welfare of the Filipino people.”
“After consulting the leadership of both the Senate and the House of Representatives, as well as the economic team, the President is confident that this course of action will help anchor inflation expectations for the coming year, allow the public to manage their finances better, and disallow hoarders and profiteers from taking advantage of the situation,” he said.
The continued rise of oil prices in the international market is among the primary reason for the sustained rise of domestic inflation, which as of September this year averaged at five percent, higher than the upper end of the government’s two to four percent target band for 2018-2020.
Under the TRAIN Law, which took effect at the start of this year, excise tax on diesel will be PHP2.50 per liter in 2018 and will increase to PHP4.50 per liter in 2019, and finally PHP6 per liter in 2020.
Excise tax on gasoline was increased to PHP7 per liter this year from PHP4.35 per liter previously. For 2019 and 2020, the rates will be at PHP9 per liter and PHP10 per liter, respectively.
The finance official said prices of basic commodities have risen “and the government recognizes that those who have been affected the most are poor Filipino families who likewise need the most help.”
“It is for this reason that the President issued Administrative Order 13 and a series of Memorandum Orders to stabilize prices and the supply of basic agricultural products for all Filipino consumers,” he added. (PNA)