MANILA - Malacañang on Friday said the recommendation of President Rodrigo Duterte’s economic team to proceed with the second round of fuel excise tax increase in January is not yet final until the Cabinet approves it.
Finance Secretary Carlos Dominguez had said Thursday it would be "unnecessary" to suspend the increase with world oil prices falling.
But Presidential Spokesperson Salvador Panelo noted that the recommendation was still set for discussion on next Tuesday’s Cabinet meeting.
Panelo said the public should wait for the President's decision on the matter, adding it “will, as always, be based on national interest and benefit to the people.”
“We cannot limit this issue in a purely economic perspective. We note the sentiments of the Filipino consumers and the President will certainly weigh in the social costs involved,” Panelo said in a statement.
“Due regard, however, must also be given to the dictates stipulated under the law, which only the Congress can modify.”
The price of Dubai crude has fallen since the economic team recommended last October the suspension of further increases. At that time, the price of the benchmark exceeded $80 per barrel, the threshold under the tax reform law that would require such suspension.
Dominguez said the Development Budget Coordination Committee on Thursday revised its assumption for Dubai crude in 2019 to $60 to $75 per barrel from $75 to $85.
The Tax Reform for Acceleration and Inclusion (TRAIN) law scheduled excise tax increases every year for 3 years starting Jan. 1, 2018, when duties were increased by P2.50 per liter for diesel, P1 per kilo for LPG, and P2.65 per liter for regular and unleaded gasoline.
TRAIN imposed excise taxes on diesel for the first time while the levy on regular and unleaded gasoline was raised to P7 from P4.35.
The economic team recommended the suspension of the second tranche as inflation hovered at near 10-year highs. Price increases steadied at 6.7 percent in September and October.