Duterte to suspend additional excise tax on oil set for 2019 — Dominguez

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Metro Manila (CNN Philippines, October 14) — President Rodrigo Duterte will soon order the temporary suspension of the next tranche of the fuel tax rate increase under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, Finance Secretary Carlos Dominguez said Sunday.

Dominguez made the announcement after an online article quoted Special Assistant to the President Bong Go as saying that Duterte had signed an order on the suspension. Go, however, retracted his statement and said he was referring to the President's certification of the rice tariffication bill as urgent. The article had also been taken down.

"President is making an early announcement of the temporary suspension of the January 2019 oil excise increase under the TRAIN Law," Dominguez said. "This announcement is being made two months before the time required by law, to proactively anchor inflation expectations and enhance the welfare of the Filipino people."

Dominguez said Duterte made the decision after consulting the Congress and his economic advisers in a bid to address inflation, which reached a nine-year high of 6.7. percent in September.

"After consulting the leadership of both the Senate and the House of Representatives, as well as the economic team, the President is confident that this course of action will help anchor inflation expectations for the coming year, allow the public to manage their finances better, and disallow hoarders and profiteers from taking advantage of the situation," he said.

The rising costs of oil in the global market are seen as among the culprits behind the continuous increase in the prices of widely-used goods.

"Today's price and multiple estimates of crude prices over the next two months show that the average price will stay above the $80 threshold, and it is therefore being announced early that the suspension mechanism will be activated," he said.

The TRAIN Law, which took effect in January, directs an increase in the excise tax imposed on oil products from 2018 to 2020. For 2019, the excise tax on fuel products will go up by another ₱2 per liter starting January. The increase, however, can be suspended if the three-month average price of Dubai crude reaches at least $80 per barrel.

Senators react

Opposition Senator Bam Aquino lauded the suspension, calling it a "small victory against price crisis" and "a win for Filipinos."

"Panalo ang pamilyang Pilipino sa pagsuspindi ng dagdag buwis sa gasolina, diesel at iba pang produktong petrolyo sa Enero," Aquino said in a statement.

[Translation:Filipino families are the winners in the suspension of additional tax on gasoline, diesel, and other petroleum products in January.]

Aquino and other opposition lawmakers last week issued a joint resolution calling on the suspension of fuel excise tax.

Majority senators, meanwhile, sent a letter to Duterte for the same reason.

This letter, Senate President Vicente Sotto III said, prompted the President to order the suspension.

"That (letter) is the reason PRRD (Duterte) decided to suspend excise tax," he said. "Latest today, he is now considering after the letter, not the resolution."

Senate Majority Leader Miguel Zubiri said the letter came following a meeting  with the President also on Monday.

"This was discussed with the President during our Monday meeting with him. [Finance Secretary]  Dominguez just asked us to formalize it with a letter as the President will consider the suspension of excise tax on fuel when he gets back from Bali," Zubiri said.

Meanwhile, Senator Grace Poe said the suspension of the oil tax rate should come "now or sooner, not in January 2019."

"That is per se and allowed as a safeguard in the TRAIN Law under RA 10963," Poe said. "Ang batas ay para sa tao. Unang konsiderasyon lagi, dapat mamamayan. Kung lalong nakapagpapahirap sa tao, i-suspend agad. Umariba na lagpas US$80 ang Dubai crude oil price base sa Mean of Platts Singapore."