[ad_1]
By Elijah Joseph C. Tubayan
Journalist
State economic officials will recommend to Malacañang next week to increase the excise tax on fuel per liter scheduled for January, canceling the initial recommendation approved by President Rodrigo R. Duterte earlier this month, announced Thursday the chief financial officer.
If the tax increase were to take place, there would be only four months left until the mid-term congressional and local elections in May 2019.
The Development Budget Coordination Committee (DBCC) met on Thursday to study the possibility for the government to suspend the second tranche of the fuel tax hike, which had been decided as a result of higher prices at $ 80 a barrel from Dubai September to early October.
Republic Act No. 10963, which entered into force last January, set an average price of $ 80 per barrel for three months as a trigger for the automatic suspension of the planned tax increase.
The law, among other major changes to the local tax structure, imposes a fuel tax P6 per liter spread over three years, with the first tranche of 2,2,50 pesos per liter imposed last January, an increase of P2 per liter fixed in 2019 and P1. .5 per liter for 2020.
"… [A] The special meeting held earlier in the day decided to recommend the continuation of the implementation of the second tranche of excise taxes on petroleum products under Republic Act No. 10963 or the Law on tax reform to speed up the process of inclusion. The recommendation comes in light of the favorable outlook for world oil prices, where Dubai crude oil prices fell by 14%, dropping from an average of $ 79 a barrel in October to $ 68 a barrel until 39, now in November, "said Finance Secretary Carlos. G. Dominguez III said at a press conference at the end of their meeting.
The price of Dubai crude – the Asian benchmark price – exceeded $ 80 / bar between September 26 and October 17, with the exception of October 15 and 16, which saw prices fall below this level. threshold, ranging from $ 61.05 to $ 78.40 / bar on October 18 – Nov 23, and dropped to $ 59.20 / bbl, $ 59.10 / bbl and $ 60.2 / bbl on 26, 27 and November 28, respectively.
Mr Dominguez added that Dubai's futures market prices were below 60 USD / bar in 2019, "indicating a downward trend in world oil prices."
"In parallel with other measures to increase food availability in the country – particularly rice – the suspension of the second tranche of excise taxes on oil was aimed at reducing inflationary pressures and relieving the Philippine people of the price. high goods. With moderate monthly inflation due to government-initiated supply reforms, coupled with falling oil prices in the global market, the DBCC believes that suspension is not necessary, "said Mr Dominguez, stressing that restrictions on rice imports would be imminent. A regular tariff regime will help reduce inflation next year – up to 0.85 percentage points according to the latest official estimates.
Malacañang announced in mid-October that it would suspend the excise tax on the fuel price per liter, as recommended by economic managers when the price of crude oil and crude oil futures in Dubai exceeded $ 80. the barrel.
Economic officials said earlier that their decision aimed to contain inflation expectations while inflation reached its highest level in nine years (6.7% in September and October). Inflation averaged 5.1% over the 10-month period ending in October, exceeding the central bank's target of 2-4% for 2018.
The latest DBCC forecasts released to reporters indicate that local pump prices are now expected to fall even though the excise tax on fuels is being applied. The diesel – used by public utility vehicles – is expected to settle at P34 per liter in January 2019 from £ 40.45 the same month this year and P38.80 currently. In addition, gas prices would reach $ 44 per liter in January 2019, up from 51.81 PRL at the beginning of the year and the current price of P47.14.
"Circumstances have changed dramatically. If we do not take this change into account, we will not deliver on our promise to act on facts and make rational decisions based on available information, "Dominguez said.
"We do not serve the president if we do not discuss these facts and developments," he added.
"Our recommendation to continue the planned increase in excise taxes on petroleum products will be discussed at the Cabinet meeting on Tuesday, December 4 and will be subject to the approval of President Rodrigo R. Duterte. "
At the same time, Dominguez said that "the DBCC will also monitor global oil market trends," as well as the regular meeting of the Organization of the Petroleum Exporting Countries (OPEC) on December 6. Reuters reported Wednesday that the decline in world crude oil prices since October had been comparable to the 2008 price drop and had been stronger than in 2014-15, prompting OPEC to agree reduction of production to support the market. According to Reuters, OPEC sources said the producers were now planning to reduce their supply by at least 1 to 1.4 million barrels a day to support prices.
The DBCC also revised its crude oil price assumptions in Dubai to 60-75 USD / bar in 2019 from 75-85 USD / bar initially scheduled at its October meeting and 70-75 USD / bar for this year.
Mr. Dominguez also stated that the DBCC's recommendation for the continuation of the fuel tax hike included the expectation that a full year-end in 2019 would result in a revenue loss of 43, 4 billion pesos. "The erosion of revenues will result in a corresponding decrease in public spending so as not to exceed the deficit target of 3.2% of gross domestic product in 2019," he said.
INFLATION SOON BACK ON THE TARGET
Bangko Sentral ng Pilipinas (BSP) governor Nestor A. Espenilla, Jr. said in a mobile phone message: "The planned suspension of the second installment is based on the belief that oil prices will exceed $ 80. the barrel. "
"This vision has now changed with recent developments in oil prices much lower. The increase in the excise tax can continue without any adverse impact on gas pump prices, which had already been taken into account. The general decline in oil prices is expected to strengthen our expectation that inflation will return to the target by 2019-2020. This will also contribute to achieving the budget deficit goal. "
Deputy Governor of the BSP, Diwa C. Guinigundo, said in a separate text that the suspension of the increase in excise on fuel would reduce inflation by 0.1 percentage point.
Bienvenido S. Oplas, Jr., president of Minimal Government Thinkers, a member institute of Economic Freedom Network Asia, said in a message on his mobile phone: "We have high inflation this year. We should expect near-zero inflation next year, stronger household consumption, stronger GDP growth … "
For the president of Philippine consumers and commuters, Rodolfo B. Javellana, Jr.,Mataas an presyo ng pagkain, presyo ng bilihin … Binabalewala nila ang posisyon ng presidente. Gumaganda na ang market then pag tinaggal mo ang excise, mas lalo itong mabuti … (The prices of food and other staples are high … the state economic managers are challenging the president's position, the market is improving, and if you suspend the excise tax hike, the situation should still be to improve … ")
[ad_2]
Source link
