Metro Manila, Philippines – The House of Representatives on Monday, March 16, has approved on final reading the measure authorizing the president to reduce or suspend fuel excise tax during national and global economic emergencies, in light of the Middle East crisis that fueled a historic surge in oil prices.
Two hundred forty-seven lawmakers were in favor of House Bill 8418, three were against, while no one abstained.
The three-member Makabayan bloc cast the negative vote, saying that the proposal is just a “band aid” solution to rising fuel costs.
“Sa ganitong kalagayan kahit pa magbawas ng buwis ang pamahalaan, walang guarantee na ang bawas ay mamamaramdaman ng mamimili,” Gabriela Rep. Sarah Elago said in explaining her vote.
[Translation: In this situation, even if the government reduces taxes, there is no guarantee that consumers will actually feel or benefit from the reduction.]
The government earlier projected a ₱6 cut in per liter prices of diesel and ₱10 for gasoline should the excise tax be suspended.
Industry players and the Department of Energy, however, admitted that the impact of the possible tax relief may take a while, as the excise tax on fuel inventory was already paid.
Meanwhile, Akbayan Rep. Chel Diokno said there should be other interventions to help the people cope with the price surge.
Diokno said his group filed a bill seeking a ₱52.8-billion supplemental fund, which will cover transport and agricultural subsidies, as well as emergency repatriation of affected Filipinos abroad.
“Suspending the excise tax is a necessary step, but it is not and will never be a complete solution. We need a comprehensive approach that addresses both the immediate and long-term survival of our people,” he said.
The bill allows the president to invoke the powers on the following conditions:
- the average Dubai crude oil based on Mean of Platts Singapore has reached or exceeded $80 per barrel for one month immediately preceding the suspension or reduction order, and;
- a state of national emergency or calamity has been declared by the president and such conditions resulted in extraordinary increases in domestic fuel prices
The levy may be suspended within six months.
The president will have this prerogative until Dec. 31, 2028, or until the next administration.
It will require the president to report to Congress within 15 days the estimated foregone revenues and the expected impact on inflation and economic activities of the suspension order after it has been issued.
