THE suspension of excise tax hikes on fuel for 2019 will have a marked impact on food prices, particularly fish, because of the sector’s sensitivity to fuel prices, Agriculture Secretary Emmanuel F. Piñol told reporters.
Mr. Piñol said the suspension of the fuel excise tax increase will be a “big relief” because of the distance from key markets of major food growing areas, including the vegetable farms of the Cordilleras, as well as the marine fishery, where fuel accounts for up to 60% of the cost.
He said relief from higher fuel taxes coincides with the rice harvest, which is boosting supply and bringing food prices down.
“We will be able to feel it in two to three weeks, just in time for the Christmas holidays,” Mr. Piñol said.
The excise tax on fuel, first raised in January 2018 with the effectivity of the first tranche of the tax reform law, was due for another round of increases in 2019, but the government decided to preemptively suspend the increase amid worries about inflation.
The tax reform law itself contains a tax hike suspension provision if the Dubai crude benchmark exceeds $80 for three months. The decision to suspend the tax hike came ahead of schedule as Dubai crude first hit $80 in late September.
Separately, Mr. Piñol said the poultry industry is seeking a farm support price to set a floor for its products alongside the imposition of an SRP.
Pork Producers Federation of the Philippines (PPFP) president Edwin G. Chen said he backs a support price for farmers, which will help them survive oversupply conditions.
Mr. Chen said the farmgate price of pork is now at P120 to P130 per kilogram, to which the Department of Trade and Industry (DTI) adds P70 to determine the SRP.
Mr. Chen, however, said that a farm support price should be on the table as the cost of inputs such as feed are also volatile. — Reicelene Joy N. Ignacio