Romualdez: House open to suspension of excise tax on oil products

Metro Manila (CNN Philippines, September 18) — House Speaker Martin Romualdez said they could recommend the suspension of excise tax on petroleum products to President Ferdinand Marcos Jr. and other economic managers if prices continue to climb.

Lawmakers met with representatives of oil companies on Monday to discuss the proposal.

"We are very much open to making suggestions as clear and direct as even making recommendations to the Office of the President and to the economic managers to consider the suspension of excise taxes on oil on the basis that if it reaches a certain price," said Romualdez.

"So kung pumalo na ng $80 baka pwedeng i-consider [If it hits $80 a barrel perhaps we can consider] to have a temporary suspension of excise taxes," he added

Lawmakers are also thinking of buying oil early in the coming months when prices are expected to rise even more.

"We can already perhaps even explore buying early or in advance and not wait until December. Baka [Maybe] we can get better prices by securing our oil requirements by making advance purchases or orders," Romualdez said.

However, Department of Energy Undersecretary Sharon Garin said this needs further study.

Aside from oil industry players, officials from the Energy and Finance departments also attended the meeting.

The government could lose ₱4.9 billion once the collection of excise tax on petroleum products is suspended. However, if this is done, prices could drop to as much as P10 per liter. Another ₱4 could be shaved off if the requirement to mix ethanol with oil products is suspended as well.

However, according to Marikina Rep. Stella Quimbo, suspending taxes should be studied carefully as it could affect government's earnings.

"Kapag nag-suspend tayo ng taxes, ibig sabihin niyan there are foregone revenues. And when you forego revenues, ibig sabihin mawawalan tayo ng suporta para sa spending," she said.

[Translation: If we suspend taxes, that would mean foregone revenues. And when you forego revenues, this means there would be less support for spending.]

She said there are available funds that can be used to give assistance to sectors affected by the price increases.

"Marami pa namang existing unutilized funds to support our consumers. Marami pa tayong natitirang pondo for fuel subsidies. Naka-lodge ito sa DOTr. Meron din tayong pondo sa DA. At the same time, meron pa tayong ibang mga subsidies na natitira sa DSWD," the lawmaker added.

[Translation: There are many other existing unutilized funds to support our consumers. We have other remaining funds for fuel subsidies. This is with the DOTr. There are funds with the DA. At the same time, there are other subsidies with the DSWD.]

The House leadership and oil industry players will meet again next week.

Lawmakers now want to know what oil companies can do to lessen the impact of continued oil price increases on the public.

Congress' recommendations on the suspension of excise taxes could be ironed out before session adjourns by the end of September.