MANILA -- An official of PTT Philippines Corp. remains optimistic about the future prospects of their business even with the likely implementation of the second tranche of the oil excise tax hike in 2019.
PTT Philippines Managing Director Thitiroj Rergsumran said Thursday they will comply with this policy, should government go through with the tax increase.
“This one is a policy of the government, so we have to follow because we believe that all the policies that the government implement will benefit the country,” the executive of the Thailand-based multinational oil firm told the Philippine News Agency (PNA) in an interview.
Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, oil excise tax will increase by PHP2.50 per liter this 2018, PHP2 per liter in 2019, and PHP1.50 per liter in 2020.
President Rodrigo Duterte has approved the earlier proposal of economic managers to suspend the implementation of the excise tax hike for next year after global oil prices breached the USD80 per barrel level last October and it did not show any let-up given the supply-related issues, among others.
Under TRAIN, the government may suspend the excise tax hike for next year if global oil prices averaged at USD80 per barrel in the last three months of this year.
However, the price of oil in the international market has declined to just more than USD50 per barrel.
Thus, economic managers have made another decision to push with the implementation of the excise tax hike scheduled for next year. They are still awaiting the decision of the President on their latest suggestion.
With the tax hike implementation likely to push through, Rergsumran said they will have to devise a strategy to counter its impact on their earnings. “We’ll do other marketing promotions to keep the customers to stay with us,” he said.
The PTT Philippines official said all the domestic oil companies have felt the impact of this tax reform and have to compete with new strategies to ensure that they remain competitive.
He explained that they remain on a wait-and-see stance for this new increase. “We have expectations, but we don’t know the real effect on our market after the next increase,” he said.
Rergsumran said the company management is determined to go ahead with opening more branches in 2019 and the number would be “not fewer than this year.”
The company targets to operate 30 more branches this year to bring the total by the end of this year to 157. To date, more than 20 of these new branches are now operating. “We will consider again for the short-term plan, but the long-term plan is to have higher (number of branches),” he added. (PNA)
