House OKs bill allowing Marcos to suspend or reduce fuel excise tax

MANILA, Philippines – The House of Representatives on Monday, March 16, approved a bill authorizing President Ferdinand Marcos Jr. to reduce or suspend excise tax on fuel products, amid rising oil prices driven by the US and Israel’s war on Iran and the continued tensions in the Middle East.

A total of 247 lawmakers voted in favor of the bill, while the three-member Makabayan bloc were the only ones who objected.

If the Senate approves a similar bill, the measure will be sent to the the desk of President Ferdinand Marcos Jr., who is expected to quickly sign it, since Malacañang already certified the measure as urgent.

Under the proposal, the President may suspend fuel excise taxes when the barrel price of Dubai Crude rises to $80, or when oil prices “increase extraordinarily” during a state of national emergency or calamity in the Philippines. 

Congress has sole taxation powers, which is why it needs to pass a bill authorizing the President to adjust excise taxes.

Oil prices in the Philippines saw a double-digit increase last week, which the Department of Energy said was the highest jump in history.

If Marcos completely suspends the fixed excise taxes on petroleum products that are imposed following the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the price of kerosene will go down by P5 per liter, diesel by P6 per liter, and gasoline by P10 per liter.

The President would also have the option to just reduce the excise tax on fuel to cushion the impact of the big oil price hike, as the government is estimated to lose P136 billion in revenues from May to December if it takes the full suspension route.

Gabriela Representative Sarah Elago of the Makabayan bloc previously said that a suspension of fuel excise tax would “fail to guarantee real relief from rising oil prices.”

“This is a short-term fix than simply removing the VAT and excise taxes through legislation,” Kabataan Representative Renee Co added on Monday.

The Department of Social Welfare Development has rolled out a cash aid program for public utility drivers affected by the oil price hike, starting with tricycle drivers in Metro Manila. – Rappler.com