Marcos signed Republic Act (RA) No. 12316 on Wednesday, March 25, fulfilling what he said earlier in the day that he would be signing the measure into law within the day. 

Under the law, the President may suspend the imposition of or reduce the excise taxes on fuel when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) reaches or exceeds $80 per barrel for one month immediately preceding the issuance of the suspension or reduction order.

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

Any suspension that the President would order shall be effective for a period not exceeding three months.

It further stated that the power of the President to temporarily suspend or reduce the excise tax on petroleum shall be exercised only until Dec. 31, 2028.

During the suspension or reduction of excise tax, oil companies shall submit to the Department of Energy (DOE) monthly information on the cost components of the price of petroleum products sold.

The law further said that within 15 days from the issuance of the suspension or reduction order, the President shall submit to the House of Representatives and the Senate a report on the following:

1. The factual basis and policy goals for the suspension or reduction of excise taxes

 

2. The estimated foregone revenues, including affected social benefits for different household deciles.

3. The expected impact on inflation and fuel prices, a cost-benefit analysis, an assessment of possible market distortions, leakages, or unintended consequences arising from the suspension or reduction of excise taxes, and other economic activity.

It ordered that the report shall include a recommendation on whether the suspension or reduction of excise taxes should be maintained, modified, or lifted, and shall form part of the basis for any continued suspension or reduction.