Duterte hikes tariffs on petroleum products to raise funds for COVID-19 fight

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Metro Manila (CNN Philippines, May 4) - President Rodrigo Duterte has signed an executive order temporarily raising tariffs on petroleum products to increase funding for the government's fight against COVID-19.

Executive Order No. 113 was signed by the President on May 2 according to the document released Monday.

Under the executive order, imported crude oil and refined petroleum products "shall be subject to a temporary additional import duty of 10 percent, on top of their existing Most Favored Nation and preferential import duties."

"There is an urgent need to augment the government’s resources to sufficiently finance the programs and measures to mitigate the effects of the COVID-19 situation and launch the country towards recovery and rehabilitation," the order said.

"This Order shall take effect immediately after its publication, and shall remain enforceable until such time that RA No. 11469 ceases to take effect, or upon the reversion of the modified rates of import duty to zero percent," it added.

The Bayanihan to Heal as One law granted President Duterte temporary special powers, among them the power to realign funds within the national budget for the government's COVID-19 response.

Budget Secretary Wendel Avisado earlier said they are exploring all possible funding opportunities pursuant to the authority granted by Congress to the President.

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The President ordered the Department of Budget and Management to ensure that the proceeds from the temporary additional import duty are used to fund measures to address the COVID-19 situation, including the cash assistance program and other forms of assistance for all those affected by the crisis.

Meanwhile, Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act, states that in the interest of the general welfare and national security, and upon the recommendation of the National Economic and Development Authority, the President has the power to increase existing rates of import duty and impose additional duty on all imports not exceeding ten percent.

The coronavirus pandemic has created a global oil crisis, with demand for gasoline and jet fuel stunted as billions of people around the world are forced to stay home.

Under the executive order, the modified rates on petroleum products will revert to zero percent, as international oil prices increase, based on the trigger prices indexed to oil prices in the world market.

"Upon a certification by the The Department of Energy that a trigger price has been reached, and the Department of Finance has been notified about the same, the Bureau of Customs shall then issue the corresponding Customs Memorandum Order to effect the said reversion," the order stated.

The said agencies with the National Economic and Development Authority and Department of Trade and Industry will implement the guidelines for effective implementation, according to the order.