Acting with haste, the House Committee on Ways and Means approved on Tuesday afternoon, March 10 a substitute bill authorizing President Marcos to suspend or reduce excise tax on petroleum products as a way to shield Filipinos from the fuel price crisis.

The substitute bill consolidates 15 bills and two joint resolutions, including House Bill (HB) No. 8292 filed by Speaker Isabela 6th district Rep. Faustino “Bojie” Dy III, and Ilocos Norte 1st district Rep. Sandro Marcos.

The measure, which seeks to grant the President temporary authority to suspend fuel excise tax during national or global economic emergencies, is being eyed on second reading approval during plenary session Tuesday night.

It also incorporates former Speaker Leyte 1st district Rep. Martin Romualdez's HB No. 5779, which seeks to remove the excise tax on fuel by amending Republic Act (RA) No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

Committee Chairman Marikina City 2nd district Rep. Miro Quimbo declared the substitute bill approved after Manila 2nd district Rep. Rolando Valeriano, a vice chairman of the panel, moved for its adoption.

The motion was also approved without objection, which paved the way for its transmittal to the plenary in time for the House member's session on 3 p.m.

The 300-plus strong legislative chamber is acting with the hope that the Middle East war--which triggered local price shocks--would end sooner than later. They hope that the proposed excise tax suspension or reduction would split the difference. 

The measure, which seeks to amend the National Internal Revenue Code (NIRC), authorizes the President suspend or reduce the excise tax on petroleum products upon the recommendation of the Development Budget Coordination Committee (DBCC), in coordination with the Department of Energy (DOE).

The DBCC is composed of the Department of Budget and Management (DBM); the Department of Finance (DOF); the Department of Economy, Planning, and Development (DEPD); and the Office of the President (OP), with the Bangko Sentral ng Pilipinas (BSP) serving as adviser.

The authority may be exercised if the average Dubai crude oil price based on the Mean of Platts Singapore (MOPS) reaches or exceeds $80 per barrel for one month immediately preceding the suspension order.

It may also be triggered if the President declares a national emergency or calamity that results in extraordinary increases in domestic pump prices of petroleum products, as certified by the energy secretary.

The suspension or reduction may apply to specific petroleum products and may be implemented either as a full suspension or partial reduction of the applicable excise tax rates.

Any suspension will be effective for up to six months and may be extended for a maximum aggregate period of one year, subject to congressional action. The authority granted to the President will remain in effect only until Dec. 31, 2028.

Before the panel approved the measure, chairman Quimbo explained why the proposal was crafted as an amendatory bill rather than a House resolution.

“For the record, right now, the way things are moving, in fact, meron nang announced na presidential certification of urgency, wala na talaga nagiging difference whether it’s a House resolution or a bill (In fact, there is already an announced presidential certification of urgency, there won't be any difference any more if its a resolution or a bill),” he said.

“But I think more significantly, with due respect to everyone, as a lawyer, when you amend a tax code — which effectively is what we are doing — a House resolution will sometimes have dubious effectivity,” he noted.

Quimbo said a House resolution merely expresses the chamber’s policy direction or sentiment and does not carry the same legal force as an amendatory law.

The Marikina lawmaker noted that the bill provides clear safeguards governing when and how the President may exercise the authority.

“It’s clear. It has one standard, which is the price of MOPS. Second, the exercise of that power cannot last more than six months. It can be extended for a year, and in fact, that exercise cannot go beyond 2028,” he said.

“Third, the President can only mandate the suspension if there is a specific recommendation, not just by one, not just by two, not just by three, but by six Cabinet members all joined together declaring that there is a need to suspend,” Quimbo added.