A SUSPENSION of the excise tax on fuel products is unlikely under the administration of President-elect Ferdinand R. Marcos, Jr., according to the incoming Finance chief.
Finance Secretary-designate Benjamin E. Diokno, who currently heads the Philippine central bank, said it would be unwise to suspend the excise tax on fuel products because reversing such a move would be “very difficult.”
“When you cut taxes on fuel, it will benefit everybody, the rich, the poor, the middle-income class,” he told CNN Philippines. “When there is a need to put it back, restore the cut because things have normalized, it’s very difficult to push such measures before Congress.”
“I think it’s a wrong move to cut taxes at this time.”
Mr. Diokno made the statement after fuel retailers on Tuesday raised the prices of gasoline, diesel and kerosene by P2.70, P6.55 and P5.45 per liter, respectively.
The current excise tax rate is P10 per liter for gasoline, P6 per liter for diesel, P5 per liter for kerosene, and P3 per liter for liquefied petroleum gas (LPG).
The Duterte administration had rejected calls to suspend excise taxes on fuel products despite the continued spike in oil prices. Instead, the government provided direct aid to the most vulnerable sectors.
Mr. Diokno said targeted assistance to jeepney drivers, farmers, and fisherfolk is “more efficient than cutting taxes” and that the next government “will continue that approach.”
However, some public utility drivers claimed they have yet to receive the P6,500 fuel subsidy promised by the government.
Mr. Diokno acknowledged that the delay in the distribution of the cash assistance is a “problem of implementation.”
“We’ll make sure implementation will be efficient and will be timely,” he said.
Mr. Marcos on Monday met with members of his economic team, including Mr. Diokno, incoming Budget chief Amenah Pangandaman, and incoming Socioeconomic Planning chief Arsenio M. Balisacan, among others.
Mr. Diokno said the economic team was tasked to prepare a medium-term fiscal plan for the next six years. “The first half will be a detailed fiscal plan,” he said, without giving details.
“The main goal is to reduce the [budget deficit] by the end of his term. We want to satisfy our plan to be an upper middle-income economy and reduce poverty by single digit.”
The government is targeting to bring down the budget deficit to 3% of gross domestic product (GDP) by 2028.
Meanwhile, Senator Mary Grace Natividad S. Poe-Llamanzares renewed her call for the suspension of excise tax on fuel and petroleum products until the global market normalizes, citing the possibility of a widespread transportation strike.
“The Executive department must alleviate the pain of our PUV (public utility vehicle) drivers and operators… While it is true that failure to meet our revenue targets may have adverse effects on our country, so could a transportation strike which can paralyze operations in key areas and cost us much more,” she said in a statement.
Senator Maria Imelda Josefa “Imee” R. Marcos said oil companies should increase the bioethanol content to keep pump prices low.
“While lawmakers are stuck in debate over a fuel excise tax suspension, increasing bioethanol content is the clear way forward to give some relief to consumers,” she said in a statement.
The Biofuels Act of 2006 requires oil companies to produce a gasoline blend with at least 10% bioethanol, but Ms. Marcos said the National Biofuels Board can recommend an increase in the minimum requirement, subject to the Energy department’s approval.
If bioethanol content is increased up to around 20% — the level safe for vehicle models as old as 2001, Ms. Marcos estimated that gasoline prices will drop by P3.60 per liter. — Kyle Aristophere T. Atienza and Alyssa Nicole O. Tan