MANILA — A ranking official of the Department of Finance (DOF) said the recommendation of economic managers to suspend the second installment of the oil excise tax increase in 2019 remains despite oil futures predicting a decline in global oil prices next year.
The price of oil in the international market has breached the USD80 per barrel mark, prompting several sectors to call for the suspension of the scheduled PHP2-billion increase of excise tax for gasoline and diesel next year under the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Finance Assistant Secretary Tony Lambino said Thursday the recommendation, which economic managers have submitted to the Office of the President (OP), “stands.”
“We are anticipating a formal announcement from OP,” he said.
The finance official said the suggestion to suspend the oil excise tax increase “was made when the prevailing and futures market prices were above USD80 (per barrel).”
Under TRAIN, the increase of excise tax for oil for 2019 may be suspended if global oil prices average at USD80 per barrel in the last three months of this year.
On Wednesday, the DOF came up with an economic bulletin quoting an oil futures report dated last Oct. 8, 11 and 12, which forecast a decline in world crude prices next year.
“While Dubai oil price levels for the next six months using Oct. 8 futures prices would have required suspension of the adjustment in excise tax for the next six months, the latest price levels show otherwise,” it said.
Citing S&P Global Platts data, the economic bulletin said forecasts made last Oct. 8 showed oil price per barrel would be at about USD82.577 for October, USD81.73 for November, and USD81.11 for December.
Also, oil futures for January next year were forecast to be lower at about USD80.72 per barrel and the drop is seen to be sustained through the year with the December 2019 level pegged at USD75.99 per barrel.
Forecasts made last Oct. 11 showed oil prices at USD81.846 per barrel in October and USD80.031 per barrel by the end of the year, while forecasts made last Oct. 12 showed oil prices at USD80.188 per barrel in October and USD77.482 per barrel by the end of the year.
With these developments, Lambino said economic managers will review “at some point next year after the suspension is implemented.” (PNA)
