House panel weighs proposal allowing PBBM to suspend fuel excise taxes

Posted by ReyFort Media

The House Committee on Ways and Means on Monday began urgent deliberations on a proposal to temporarily suspend excise taxes on fuel, following a request from President Ferdinand “Bongbong” Marcos Jr. for Congress to study measures to shield Filipinos from the impact of surging global oil prices.

The committee, chaired by Marikina 2nd District Rep. Miro Quimbo, was briefed by key government agencies on the economic, fiscal, and supply implications of rising petroleum prices amid tensions in the Middle East.

The panel will hold a full-blown hearing on Wednesday to take up the proposed bill authorizing the temporary suspension of fuel excise taxes.

“We have to fast-track this. We’re waiting for the presidential certification so we can actually approve it as soon as possible,” Quimbo said.

The proposal would authorize the President, upon recommendation of economic managers, to temporarily suspend or reduce fuel excise taxes when global oil prices reach extraordinary levels.

Lawmakers convened the briefing to gather data and assessments from government agencies before formal deliberations begin on the measure.

Officials from the Department of Economy, Planning and Development warned that escalating crude oil prices could push inflation beyond the government’s target range if the trend continues.

Based on simulations presented during the briefing, inflation could rise to between 4.5 percent and 5.1 percent under one scenario, while a more severe case could push inflation as high as 6.3 percent to 7.5 percent.

Energy officials warned of a sharp spike in pump prices, while Finance officials cautioned lawmakers about the fiscal impact of suspending fuel taxes.

Data presented during the briefing showed that fuel-related taxes generate an average of about P276 billion annually, including P160 billion in excise taxes and P116 billion in value-added tax (VAT) collections.

Officials said suspending fuel excise taxes from May to December alone could result in about P136 billion in foregone revenues, though part of the losses may be offset by additional VAT collections if oil prices continue to rise.

Despite the potential relief, Quimbo said lawmakers want clear safeguards to ensure that consumers rather than oil companies benefit from any tax suspension.

He cited the experience under the Rice Tariffication Law, which lowered tariffs on imported rice but did not immediately translate into lower prices for consumers.

“That is our biggest fear—that we will lower taxes but the people will not feel the impact… We are afraid that the only people who will benefit from this are the big oil companies or the businessmen who sell gasoline,” Quimbo said in Filipino.

The lawmaker said the goal of the committee is to ensure that any policy response to rising oil prices is grounded in solid economic data while protecting both vulnerable sectors and the country’s middle class. (M. Cruz/Manila Standard)