Duterte eyes suspension of excise tax on oil
President Rodrigo Duterte said he might order the suspension of the excise tax on oil to ease inflation.
But Finance Assistant Secretary Tony Lambino said suspension of the excise tax could not take place immediately since the Tax Reform for Acceleration and Inclusion (TRAIN) Law provides for a certain condition.
"Maybe," Duterte said on Tuesday night in a press conference in Malacanang when asked if he has a plan to put on hold the implementation of the excise tax after inflation hit 6.7 percent in September, highest in nine years.
He said he would talk with Finance Secretary Carlos Dominguez III. He added the possibility of not implementing the P2-increase.
In a press briefing in Malacanang on Wednesday, Lambino said under the TRAIN Law, the suspension mechanism for excise tax has been in place.
"The suspension mechanism is if its (price) reaches $80 or above 3-month average, to be precise, it's MOPS - Mean of Platts Singapore index," he said.
Lambino said he was not sure if the P2 that Duterte was referring to was the increase in the excise tax in 2019.
Some quarters, including congressmen and senators, have been pushing for the suspension of the excise tax on oil due to the rising inflation. There were proposals to amend the TRAIN Law pertaining to the suspension mechanism on excise tax on oil.
But Lambino insisted that based on the data of the Philippine Statistics Authority, inflation rose last month due to high prices of food.
He said food inflation "is the biggest driver of higher prices. Again, it's rice, fish, vegetables, and meat."
"And so, if you look at the food versus non-food analysis, food is accelerating while non-food is decelerating in terms of the inflation rate. So that’s why the economic development cluster prioritized immediate actions to bring down the prices of food by increasing supply," he added.
According to PSA, the jump in inflation in September was due to food and non-alcoholic beverages, which rose to 9.7 percent. Food and non-alcoholic beverages contributed 38.34 percent in the overall inflation. Celerina Monte/DMS