Suspension of next fuel tax hike will help 'manage' inflation expectations: DOF

ABS-CBN News

Posted at Oct 16 2018 11:11 AM | Updated as of Oct 16 2018 11:50 AM

Customers fill up their vehicle's tank at a gas station in Quezon City on October 8, 2018. Petroleum companies are set to increase oil prices the next day, marking the 9th consecutive week of oil price hikes. Mark Demayo, ABS-CBN News

MANILA - The early suspension of the second tranche of excise taxes on fuel may not bring down prices of petroleum products today but it could help manage the public's inflation expectations, a finance official said Tuesday. 

Speaking to DZMM radio, Department of Finance (DOF) Asec. Tony Lambino said some Filipinos blame excise taxes on fuel for the rising prices of goods. 

Lambino said the taxes imposed on petroleum products only contribute 25 percent of its total increase, while 75 percent was due to the rising world crude oil price. 

"May psychological factor din po kasi ang inflation. We can also anchor those expectations better pag naanunsyo ng maaga na hindi muna itataas ang excise taxes," Lambino said. 

"Kailangan po natin i-manage ang expectations ng ating mga kababayan, dahil 'yung contribution ng oil excise sa pagtaas ng presyo, akala ng marami 'yan ang rason," he added. 

The rise in consumer prices accelerated for the ninth straight month at 6.7 percent in September.

Asked whether there is a possibility of re-imposing the next increase, Lambino said it is unlikely for the world crude oil price to go below the $80 per barrel threshold due to the expected global demand during the winter season and the geopolitical issues that hinder oil-producing countries to generate more products.

Special Assistant to the President Bong Go on Sunday announced the suspension of the second tranche of excise taxes on fuel under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

The administration's economic managers confirmed the said announcement, stating that the move was done to "proactively anchor inflation expectations."

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