MANILA - President Rodrigo Duterte on Wednesday said the public should not be “so sad about being taxed,” after he gave the green light for the second tranche of the fuel excise tax hike in 2019.
“Don’t be so sad about being taxed because your money during my term is safe. I will not allow corruption,” Duterte said in his speech during an awarding ceremony for model overseas Filipinos.
Budget Secretary Benjamin Diokno earlier said the condition for suspending the fuel tax hike would no longer be present next year, and that the government stands to lose about P43.4 billion in revenues if the suspension pushes through.
The price of Dubai crude has fallen since the economic team recommended last October the suspension of the fuel tax hike. At that time, the price of the benchmark exceeded $80 per barrel, the threshold under the tax reform law that will require such a suspension.
The Development Budget Coordination Committee has revised its assumption for Dubai crude in 2019 to $60 to $75 per barrel from $75 to $85.
Diokno, meanwhile, said Dubai crude oil futures project further decline below $60 per barrel in 2019.
Diokno noted that diesel’s peak price in 2018 was P49.80 per liter and it will be P37.76 in Jan. 2019, inclusive of the P2 peso excise tax. For gasoline (95 octane) it was P60.90 at its peak, and it will be P50.82 in Jan. 2019, also inclusive of P2 additional excise tax, he said.
Presidential Spokesperson Salvador Panelo said Duterte heeded the recommendation of his economic managers to push through with the hike because of reduced global oil prices and its impact on the government's budget and infrastructure programs.
"If you suspend it, then it will affect your budget, the personnel services of the national government. If you do that, we will be losing P43 billion in revenues," Panelo told ANC.
"It will affect the entire services, budgets, infrastructure programs of the government and that will be bad for the people."
The Tax Reform for Acceleration and Inclusion (TRAIN) 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 of LPG, and P2.65 per liter of 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 earlier recommended the suspension of the second tranche as inflation hovered at near 10-year highs. The price increases steadied at 6.7 percent in September and October, but it tapered to 6 percent in November.
Meantime, the 8-man opposition senatorial slate in the 2019 polls called the government insensitive for pushing through with the imposition of higher taxes on fuel.
“The recent announcement of the government that it plans to continue the imposition of fuel excise tax only proves the government’s insensitivity to its impact on the people. Here comes this government’s economic managers announcing its plan to continue imposing this tax in January 2019 when they have not even addressed its consequences that brought our people suffering from the increase in prices the past months,” said former House Deputy Speaker Lorenzo Tañada, one of those running in the opposition coalition.
“It is clearly senseless for the government to announce the suspension of the fuel excise tax and then withdrawing it. We demand the government to explain why it was not able to implement the mitigation measures, all the support that they promised to extend to the poor who will be negatively affected by this tax policy.”
Opposition Senator Bam Aquino also urged the government to shelve the plan.
“This sudden change of heart is baseless because inflation is still higher than their target,” Aquino said in a statement.
“This means we are still in the middle of a crisis of skyrocketing prices of goods, that’s why pushing through with the increased fuel excise tax is wrong.”
Meanwhile, Senator Risa Hontiveros said the flip-flopping “exposed the government's ‘wobbly policy’ in protecting the public from the negative impact of unstable oil prices.”
"If the government failed to foresee the depth and gravity of the impact of volatile international oil prices on our inflation rate, what makes it think that the overall economic environment is turning around for the better? Isn't it more prudent to continue to allow the safety nets, such as the suspension of the fuel excise tax, to take full effect to shelter the people in an uncertain economic climate?" Hontiveros said.