Duterte, Cabinet OK fuel tax hike

 MANILA, Philippines — Amid the highest inflation rate in many years, President Duterte approved at a Cabinet meeting last night the recommendation of his economic team to proceed with the fuel excise tax increase next year.

The President made the decision after discussing with his economic managers the impact of an earlier plan 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 to reporters the President’s decision last night. “He’s simply implementing the law,” Diokno said.

At a briefing last Monday, presidential spokesman Salvador Panelo said the matter would be taken up during the Cabinet meeting so that economic managers would be able to explain it in greater detail to the President and  lawmakers.

Diokno, Finance Secretary Carlos Dominguez III and Economic Planning Secretary Ernesto Pernia had recommended the continuation of the next round of oil tax increase in 2019, citing the drop in world crude prices.

With oil prices in the world market dropping, the Development Budget Coordination Committee (DBCC) last week said it was no longer pushing for the suspension of petroleum excise tax hike next year.

Last week, Dominguez said the DBCC recommended that the P2 increase in the excise tax on oil be implemented in January next year as scheduled under the second phase of the comprehensive tax reform measure.

“The circumstances have changed drastically,” Dominguez said, citing the drop in oil prices.

“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 said.

“This is not a rushed decision. This is based on what the facts are today,” he said.

Last Nov. 14, Malacañang 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.

Earlier yesterday,  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 said 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 added the administration was apparently 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,” he said in Filipino.

“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.  – With Cecille Suerte Felipe

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