Metro Manila (CNN Philippines, September 20) — Albay Rep. Joey Salceda on Tuesday proposed a formula that would reduce the excise tax on oil products by ₱3 when the average Mean of Platts Singapore (MOPS) price exceeds $80.
But Salceda explained the excise tax can still increase if the MOPS, a pricing mechanism used to determine the cost of crude oil and refined petroleum products in Asia, hits below $80.
\”If you look at the price of oil globally, it has been volatile,\” the lawmaker said in an interview with CNN Philippines’ The Final Word.
\”A highly volatile and socially sensitive commodity should not have such an inflexible tax regime,\” he added in a separate statement.
House Speaker Martin Romualdez earlier said they could recommend the suspension of excise tax on petroleum products to President Ferdinand Marcos Jr. and other economic managers if prices continue to climb.
But Finance Secretary Benjamin Diokno warned of \”serious consequences\” on the government’s target to regain a healthy fiscal position if lawmakers decide to push for the suspension of value-added tax and excise tax on petroleum products.
Citing the excise tax law, Diokno said there is a provision that if the revenue (value added tax) exceeds the target, it can be used to help fisherfolk, farmers, and transport workers.
The country has an estimated ₱9.8 billion in excess VAT revenues which can be used for fuel subsidies, he added.
Salceda, who chairs the House Ways and Means Committee, expressed optimism that fuel prices would stabilize from $60 to $80 per barrel next year.
He also refuted claims that the possible revival of the oil price stabilization fund would help the country in the long run.
\”It doesn’t work… You don’t know where it goes eventually,\” Salceda said.
The lawmaker also proposed to reduce the bioethanol requirement of 10% to 5% in gasoline, which will reduce its total price by ₱3.1 per liter.
