DUBAI: The Philippine government will suspend the collection of excise taxes on petroleum products if global crude oil prices hit $80 a barrel to soften its impact on Filipino consumers, a presidential spokesperson said Tuesday.
The announcement comes after oil companies on Tuesday implemented their biggest price hike for gasoline products so far this year of 1.6 pesos per liter ($0.03), and prices of diesel and kerosene products up by about 1 peso a liter, with what they claimed was to reflect ‘movements in the international oil market.’
“Excise taxes will be suspended when prices, If I am not mistaken, reach $80 [per barrel]. We are ready when to suspend the collection when oil prices reach that level,” presidential spokesperson Harry L. Roque said during a press briefing.
“The collection will be suspended,” he said, as part of contingencies to protect the public from a possible oil-price shock.
The new duties on fuel – and other items such as cars, tobacco and sugary drinks – are part of the Tax Reform for Acceleration and Inclusion (TRAIN) law which took effect at the start of the year.
The first tranche of the Philippine government’s tax restructuring has been blamed for the rise in consumer prices, which rose 4.5 percent in April and breached the year’s target of between 2 percent and 4 percent.
Finance Secretary Carlos Dominguez, however, said the roughly two-thirds of the April inflation rate was due to the demands of a rapidly-expanding economy, with the TRAIN accounting for only 0.4 point of the increase instead of the estimated 0.7 point.
“We will coordinate with the Department of Finance and the Department of Budget and Management if the benefits [for poor families] aside from the P200 monthly subsidy [as part of the amelioration program] have been released,” Roque said. “There are still other benefits to be given to soften the effects of TRAIN.”