By Genalyn Kabiling
The country’s economic managers made a “logical” move to withdraw an earlier recommendation to suspend the second tranche of fuel excise tax next year, a Palace official said Sunday.
Presidential Spokesman Salvador Panelo said the economic team initially thought world oil prices might breach $80 per barrel that would warrant the suspension of the higher excise tax on oil products in 2019 under the tax reform law.
The global oil costs however started to drop, prompting the economic mangers to recommend to President Duterte to push through with the higher fuel excise taxes instead.
Such recommendation will be discussed further when the President meets the Cabinet in Malacañang this Tuesday, according to Panelo.
“Actually yung recommendation na yun they were just anticipating na tataas pa ng tataas. Eh nagkamali sila ng basa, biglang bumagsak [Actually they made the initial recommendation since they were just anticipating the prices will further increase. but they made a wrong projection as oil prices began to drop],” Panelo said in a radio interview.
“And the reason why sinususpindi sila is umaakyat, baka lumagpas ng $80 per barrel, eh bumababa na eh. So logically, dapat talaga iatras mo yung recommendation [And the reason they wanted to suspend the tax because the oil prices might breach $80 per barrel. But it has started to decrease so logically, you must withdraw your recommendation],” he added.
The President’s economic managers recently urged the President to press ahead with the additional P2 levy on oil products in January 2019 in light of the drop in oil costs. From an average of $79 per barrel in October, oil prices are reportedly expected to further decline to below $60 per barrel in 2019.
Panelo said the proposed fuel tax increase would be placed under review by the President and the Cabinet. He assured the public that the President’s decision would be based on national interest and benefit to the people.
“We cannot limit this issue in a purely economic perspective. We note the sentiments of the Filipino consumers and the President will certainly weigh in the social costs involved,” he said.
“Due regard, however, must also be given to the dictates stipulated under the law, which only the Congress can modify,” he added.
Under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the government can suspend the next round of increase in fuel excise tax if the three-month average of Dubai crude hits $80 per barrel.