Senators bat for excise tax deferment, biofuels, higher subsidy as crude costs spike

Sherrie Ann Torres, ABS-CBN News

Posted at Mar 08 2022 06:00 PM

Defend Jobs Philippines holds a protest at a gas station on Commonwealth Avenue in Quezon City on March 02, 2021. The group urged the government to raise wages instead of hiking prices of fuel citing the challenges of the rising cost of living amidst a national public health emergency. Jonathan Cellona, ABS-CBN News
Defend Jobs Philippines holds a protest at a gas station on Commonwealth Avenue in Quezon City on March 02, 2021. The group urged the government to raise wages instead of hiking prices of fuel citing the challenges of the rising cost of living amidst a national public health emergency. Jonathan Cellona, ABS-CBN News

MANILA - Senators on Tuesday proposed various measures to cushion the impact of high fuel prices on consumers as the cost of crude continues to rise on the world market.

Senate Minority Leader Franklin Drilon said the government can suspend the collection of excise taxes on fuel as the TRAIN (Tax Reform for Acceleration and Inclusion) Law allows State intervention in the pricing of fuel during emergency situations.

Drilon said, the Department of Finance and the Bureau of Internal Revenue, can actually suspend excise tax on fuel collection once crude oil price reaches $80 per barrel.

“The intention of the TRAIN law is to give the DOF power to arrest possible inflation. The law recognizes that if the price of oil per barrel exceeds $80, then it is bad for the economy and the consumers. This is the spirit of the law,” Drilon said.

Drilon also cited that under the TRAIN Law, the DOF “may recommend the implementation or suspension of the excise tax on fuel” based on an annual review.

“Filipinos are suffering. The burden should be borne by the government. The government cannot just stand and hide behind the law to say that there is nothing that can be done. We cannot wait for the law to be amended before we act. The situation is changing rapidly by the day and we need to act fast,” Drilon added.

He said the DOF has the power not just to suspend the imposition of excise taxes "whenever the price of oil per barrel exceeds $80." 

"We should be mindful of the purpose in putting safeguards in the law. It was to cushion the inflationary effects of fuel prices and the untold hardships it will bring on our citizens,” said Drilon.

Senator Joel Villanueva also called on the government to review fuel excise taxes.

“Let's carefully study the next steps regarding excise tax for gasoline. On one hand, we can reduce or remove it for the meantime so that we would take some of the burden off our consumers," Villanueva said. 

He also called for the “immediate and efficient” distribution of fuel subsidies to transport, agriculture and fisheries sectors.

Villanueva added that continuing work-from-home setups can also lessen fuel consumption.

Senate Majority Leader Juan Miguel Zubiri in a separate statement, echoed Drilon’s position but added that long term solutions must also be crafted to protect the country’s interests.

“So long as we are dependent on foreign oil, our prices will be dependent on the very volatile international arena as well. That is why we must strengthen our local alternative fuel sources, like biodiesel and bioethanol, which can be produced in the country,” he said. 

Zubiri authored the Biofuels Act of 2006.

“As we’re seeing now, we cannot afford to be dependent on imported fuels. We have to cultivate our own fuel industries, and ensure that we have sustainable fuel sources that our people can depend on at all times,” Zubiri said.

He added that the government should also promote the use of electric vehicles.

Senator Sherwin Gatchalian, chair of the Senate energy committee, meanwhile said the Department of Energy should order an increase in the minimum oil inventory to 45 days from 30 days.

For Senator Grace Poe, the current situation should push the government to consider an increase of subsidy to sectors in great need, specifically, the public transport and agricultural groups.

“Government must act with dispatch in distributing the aid as our PUV drivers and farmers and their families suffer the battering of high prices by the day. We count on the Senate to be equally supportive of the increased aid in case legislative action is needed,” Poe said.

Senator Imee Marcos, chairperson of the Senate economic affairs committee, meantime pressed the national government provide more 'ayuda.'

“Runaway oil prices are setting us back to Day One of the Covid-19 pandemic. We’re again in a mad scramble to identify other sources of subsidies and ‘ayuda,’ “ Marcos said.

Meanwhile, key Senate leaders have also expressed their readiness to participate in a special session that might be called or requested by the President.

This, even if majority of them are now in the thick of their campaign activities.

“If the President calls for a special session of Congress, we must comply. Whether or not I will support the declaration of a state of economic emergency will depend on the proposal to be submitted by Malacañang,” Senator Panfilo Lacson said.

"It's part of our work. If the President calls for a special session, its incumbent upon me to convene the Senate," Senate President Vicente Sotto III said.

"Yes I support the call for a special session to address rising prices, especially fuel and power and to provide assistance to those who need it," Senate President Pro Tempore Ralph Recto said.

 

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