PRESIDENT Rodrigo Duterte has approved the suspension of the second tranche of fuel excise tax increases under the Tax Reform for Acceleration and Inclusion (Train) law, Budget Secretary Benjamin Diokno said Wednesday, November 14.
The decision to suspend additional increases was made amid a downtrend in oil prices, with oil companies annnouncing a rollback in pump prices this week.
Diokno said he was willing to stick to the economic team's recommendation despite the decline in prices.
"We already anticipated that (the) price of oil will be much lower next year. So if you ask me, I'm willing to recommend we stick to the decision not to impose additional P2 in the meantime," he said.
The suspension of the additional fuel excise taxes will be subject to quarterly assessment.
"Let's see. We will evaluate on a quarterly basis," Diokno said.
Diokno announced in a press briefing Wednesday that he got a communication from Executive Secretary Salvador Medialdea about the approval of their recommendation.
In a memorandum dated November 8, the Palace notified the economic team that their recommendation has been approved.
"Please be informed of the approval of your recommendation to suspend the next scheduled increase in the excise tax on fuel," reads the memorandum signed by Medialdea on the President's authority.
Aside from Diokno, other members of the economic team are Socioeconomic Planning Secretary Ernesto Pernia and Finance Secretary Carlos Dominguez III.
They recommended in early October the suspension of the second round of excise tax increases on fuel based on projections that gasoline and diesel prices based on the Mean of Platts Singapore (MOPS) would stay elevated.
At the time, the team said the suspension mechanism under the Train law had been triggered because the MOPs gasoline and diesel prices had breached the $80-per-barrel level.
Domestic pump prices are benchmarked on MOPS, the daily average of all trading transactions as assessed by Singapore-based market wire service Platts.
Read: DOF exec: Train law suspension mechanism has been triggered
Under the Train Act, which took effect on January 1, 2018, additional excise taxes on fuel are scheduled for implementation on January 1, 2019.
This would bring the excise tax rates to: P4.50 on diesel per liter from the current P2.50 per liter; P2 per kilogram on liquefied petroleum gas (LPG) from P1; and P9 per liter of regular and unleaded premium gasoline from the current P7 per liter. (SunStar Philippines)