Duterte OKs DOF’s recommendation to retain fuel excise taxes

MANILA – President Rodrigo Duterte has approved the recommendation of the Department of Finance (DOF) to continue collecting the excise taxes on petroleum products.

This, after Finance Secretary Carlos Dominguez III warned that suspending the collection of fuel excise taxes would reduce the total government revenues by PHP105.9 billion in 2022.

In a prerecorded Talk to the People aired Wednesday morning, Duterte said he convened a series of meetings with Cabinet secretaries because his decision would be based on their recommendations.

“The Cabinet members aren’t there for nothing. Sila ‘yung magtrabaho at ako (They will do the job, and me), I will just decide after reading the reports, then I decide. That’s what I’m here for to talk to the nation,” Duterte said during his meeting with Cabinet officials at Malacañan Palace on Tuesday night.

Dominguez told Duterte that the proposed suspension of excise taxes on fuel products would only force the government to “borrow more money” due to possible revenue losses.

“In 2023, that goes up to PHP114.4 billion; in 2024, PHP123.6 billion; and so on. For the 10-year average of PHP160.3 billion a year or a total of PHP1.76 trillion for 10 years. This is equivalent to roughly one half of one percent of our GDP (gross domestic product),” Dominguez told Duterte.

Dominguez added that the proposal would only benefit the rich.

“The bottom 50 percent of the Philippines, they only consume 13 percent of the fuel. So, cutting the tax will benefit more the people who have cars and the other richer people. We will not be benefitting so much the bottom 50 percent of our population, that will make it very inequitable,” he said.

Dominguez pitched to instead provide monthly subsidies worth PHP200 each to around 12 million poor Filipinos for one year.

“So, to summarize again: retain the fuel excise taxes imposed under TRAIN (Tax Reform for Acceleration and Inclusion) Law [and] provide targeted subsidies to the lowest 50 percent of the households in the Philippines, totaling around 12 million people. This will cost PHP33.1 [billion] per — for the first year,” he said.

Dominguez said his office’s proposal is “sustainable” and “something that we can afford as of this time.”

Duterte approved Dominguez’s recommendation.

Duterte said: “So sige, ‘yun ang policy ng executive department (fine, that would be the executive department’s policy).”

In a separate online press briefing on Wednesday, acting Presidential Spokesperson and Communications Secretary Martin Andanar said the Department of Budget and Management would release the guidelines on the distribution of additional relief to poor Filipinos.

“Unawain po natin na hindi lahat ay mabibigyan. Uunahin po natin yung most vulnerable sector. Ang most vulnerable at most affected ay ang mga mahihirap nating kababayan at minimum wage earners (Please understand that not all Filipinos would receive the assistance. We will prioritize the most vulnerable sector. The most vulnerable and most affected are the poor and minimum wage earners),” Andanar said.