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Senators call for fuel tax hike suspension

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SENATORS on Wednesday said they want Malacañang to reconsider its decision to go ahead with the increased fuel excise tax in 2019 as called for by the tax reform law.

In a statement, Senator Paolo Benigno A. Aquino IV said Filipinos are “dismayed by the backtracking on the decision to raise taxes because they are suffering from high prices.”

“They should have listened to the Filipinos and should no longer increase the excise tax on petroleum under the TRAIN (Tax Reform for Acceleration and Inclusion) law. Everyone knows that the fuel tax increase is the reason why there are high prices in the market,” he added.

Senator Joseph Victor G. Ejercito told reporters in a mobile phone message: “Still hoping for some sense of sensitivity in our economic managers. We are the ones that the people get to talk to and we know the pulse.”

In a statement, Senator Risa N. Hontiveros-Baraquel described the decision as “premature and impulsive” and raised doubts whether the government can adequately forecast the economic situation next year.

“Why lift the suspension on the fuel excise tax collection, one of the few safety nets that protects the public from the volatility of the international oil market? 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?” she said in a statement.

Senator Francis G. Escudero raised the same concerns, citing the “erroneous projection” of economic managers in October that the Dubai crude oil benchmark would remain above the $80 per barrel threshold until the end of the year.

“Considering the previous erroneous projection in October, certainty becomes nil at best and no assurance can ever be had either by the President or the public itself that high prices of goods and services will never happen, not to mention the fact that election spending will definitely exacerbate inflation in 2019, an election year, where demand-pull inflation may likely occur,” he said in a statement.

Mr. Escudero also filed Senate Resolution No. 964 on Wednesday, urging President Rodrigo R. Duterte to suspend the increase of fuel excise tax in 2019.

Senator Juan Edgardo M. Angara said it was important as well for the government to fully implement the social mitigating measures, such as the unconditional cash transfer and the Pantawid Pasada components of the program, as authorized by the tax reform law.

Senate President Vicente C. Sotto III said it was understandable that Malacañang reached the decision to proceed with tax hike due to series of rollbacks in fuel prices. However, he said the government should also target any parties who may be taking advantage of the situation.

“What I would do is to target those who are taking advantage. They raised prices even though they are not directly affected by the high fuel prices, but they are using it as an excuse,” he told reporters.

Mr. Duterte, in a Cabinet meeting on Tuesday evening, heeded the economic manager’s recommendation to proceed with the 2019 fuel excise tax, reversing his earlier order to suspend it.

The TRAIN law imposes excise taxes on gasoline and diesel of P7 per liter and P2.50 per liter, respectively, in 2018. Starting Jan. 1, 2019, gasoline excise tax will go up to P9 while diesel will increase to P4.50.

The law also has a suspension provision on the scheduled increase of fuel excise taxes if the average Dubai crude benchmark price for three months prior to the scheduled increase reaches or exceeds $80 per barrel. — Camille A. Aguinaldo