House to pass bill on oil excise tax reduction amid price plunge

MANILA – The House of Representatives will pursue the passage of a measure reducing excise taxes on certain petroleum products despite the continued downward trend in oil prices, a lawmaker said on Wednesday.

In a news conference, House Deputy Majority Leader and Quezon City Rep. Jesus Suntay said there is a need to give the Filipino people a reprieve from the twin challenges of the coronavirus pandemic and soaring oil prices in previous months.

The proposal to reduce excise taxes on certain petroleum products for a period of six months, as proposed in House Bill 10488, was on top of the agenda of the House when it resumed its session earlier this month. It is already up for plenary debates in the lower chamber.

“Our people, not only ‘yong mga simpleng mamamayan natin pati ‘yong mga negosyante natin, mga naghahanapbuhay eh kailangang-kailangan naman ng konting reprieve from the government (Our people, not only citizens but also businessmen, need a bit of reprieve from the government),” Suntay said.

Suntay explained that the House was not asking to suspend altogether the fuel excise taxes, but only the increases imposed under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law.

“We’re not asking na i-suspend lahat ng excise tax on fuel. Ang sinasabi naming i-suspend ‘yong percentage na pinatong natin when we approved the TRAIN Law. Kasi tuloy-tuloy ‘yong pagtaas ng presyo ng langis at alam naman natin we are coming from the pandemic (We’re not asking to suspend all excise taxes on fuel altogether. What we are proposing is to suspend the increase in fuel excise duties when we approved the TRAIN Law because of the successive oil price hikes and since we all know we are coming from the pandemic),” he said.

Speaker Lord Allan Velasco earlier underscored the need to ensure that the country’s “economic recovery will not be hampered by unwelcome disruptions, such as the unimpeded sharp rise in the cost of fuel.”

Suntay expressed hope that the bill would be approved on third reading in the coming week and will gain support in the Senate.

“I’m sure ‘yong mga kasamahan natin (I’m sure our colleagues) would also want to give it as a Christmas gift to the Filipino people, who have been hit hard by this pandemic,” Suntay said. “I don’t believe that it will have a long-term negative effect on our economy or the performance of the government kung isu-suspend natin itong karagdagang excise tax lang (if we are going to suspend the increase in excise tax rates).”

The bill aims to reduce excise taxes on diesel, kerosene, and liquified petroleum gas to zero, while excise taxes on low-octane gasoline, often used by tricycle drivers, will also be reduced to PHP4.35.

There is a self-correcting mechanism in the bill that would revert to the TRAIN law rates if the prices normalize.

“In fact, naglagay pa nga tayo ng colatilla na pag bumaba na sa USD65 to a barrel ibalik natin kaagad ‘yan (excise tax) automatic (In fact, there is a colatilla that if it goes back to USD65 per barrel, we would return the excise tax [rates] automatically),” he said.