MANILA -- Suspension of the second installment of the oil excise tax hike pushes through on Jan. 2, 2019 even now that global oil prices have gone down below USD80 per barrel, but Finance Secretary Carlos Dominguez III said they are closely monitoring changes in the world crude market.
President Rodrigo R. Duterte has approved economic managers’ proposal to suspend the scheduled PHP2 per liter increase on oil excise tax for 2019 under the Tax Reform for Acceleration and Inclusion (TRAIN) law after price of oil in the international market went beyond USD80 per barrel in recent months.
Under TRAIN, oil excise tax may be suspended if global oil prices exceed the USD80 per barrel threshold for three consecutive months this year.
Global oil prices have surpassed the USD80/barrel threshold and did not show any signs of a letting up, fueled mostly by geo-political tensions earlier this year. However, it has since gone down to a little over USD50/barrel to date.
In a briefing at the sidelines of the consultation event with the private sector and other stakeholders dubbed “Sulong Pilipinas” here Monday, Dominguez said Finance officials “are currently again reviewing” their recommendation and noted that the drop in global oil prices “is a totally unexpected” but a “pleasant development.”
“I hope we have more developments like this. We are currently reviewing the situation especially now that prices have gone down to USD55 dollars per barrel or thereabouts. So that’s going to have big effect in the reduction in inflation,” he said.
Dominguez said any changes in their proposal will depend on the path of global oil prices.
“Everything is possible because we cannot project. Less than 60 days ago we’re talking that we thought prices will go at that level, but we have a pleasant surprise. Sometimes the market is wrong,” he added. (PNA)
