By Kenneth Christiane L. Basilio, A reporter
The measure giving President Ferdinand R. Marcos, Jr. The authority to suspend the fuel excise tax is headed to the House, after the House of Representatives on Wednesday adopted the Senate version as lawmakers rush to give him the power to ease the rise in oil prices linked to the Iran war.
Lawmakers adopted Senate Bill (SB) No. 1982 by voice vote, they rushed its approval into law by bypassing a joint congressional committee tasked with resolving differences between the Senate and House versions.
“It’s almost a copy of our bill,” said Marikina Rep. Romero “Miro” S. Quimbo, who heads the House Ways and Means Committee, told. BusinessWorld on the phone. “We are absolutely pressed for time, and going into a bicameral congressional committee could unduly delay it.”
Senate President Vicente C. Sotto III told the Senate that the proposal will be sent to Mr. Marcos to sign.
The measures to cut jobs in petroleum products come as lawmakers scramble to approve an executive with the power to cut fuel costs, which threatens inflation and weighs on economic growth, as global crude prices continue to rise due to the US-Israeli war with Iran.
The approval of the bill comes as the conflict continues into a third week with no end in sight as the US and Iran show no desire to reach a deal, and as Tehran continues to retaliate with missiles and drones following an unauthorized air strike by the US and Israel on February 28.
The war has raised global concerns that it could fuel inflation as vital oil and gas exports from the energy-rich region remain blocked in the Strait of Hormuz, a key waterway through which a fifth of the world’s supplies pass.
Under SB No. 1982, the President, on the recommendation of the inter-agency budget committee, may suspend or reduce the collection of excise duty on fuel if the average Dubai crude oil price based on the Mean of Platts Singapore benchmark reaches or exceeds $80 per barrel per month.
The bill also requires the President to submit to Congress within 15 days of issuing the order a “factual basis” for suspending or terminating the fuel tax, including estimates of future revenue and the impact of inflation, fuel prices and economic activity, and subsequent monthly reports.
Oil companies will also submit monthly information on their cost components for the price of oil products to the energy department.
The Senate and House proposals differ mainly in terms of duration and automatic triggers. The Senate bill limits the President’s power to three months, while House Bill No. 8418 allows for a six-month suspension. Extensions cannot last more than a year.
“It’s the same,” said Mr. Quimbo. “It doesn’t really matter because in three months, it will be extended again.”
The Senate measure also includes a safeguard that automatically restores the tariff reduction if the average Dubai price falls below $80 per barrel, a condition absent from the House version.
“The suspension of excise duty on fuel will not stabilize oil prices, which are fluctuating due to the war in the Middle East, but it will slightly reduce the pain caused by the increase in oil prices,” said Foundation for Economic Freedom President Calixto V. Chikiamco in a Viber message.
He added that the possible effects of any reduction or suspension of fuel excise tax could range from P10 for gasoline and P6 for diesel.
“It will also reduce much-needed government revenue, which could have funded additional schools or infrastructure,” said Mr. Chikiamco.
Statistics from the Ministry of Finance revealed that stopping the collection of excise tax could lead to R136 billion, which could increase the government’s deficit and increase the country’s debt.
Suspending the excise tax on fuel may further increase prices, said Philippine Chamber of Commerce and Industry Chairman Emeritus George T. Barcelon.
“I think it will reduce the price of oil a little bit for consumers,” he said on the phone, noting that oil prices set market costs for all products.
He said the government should consider reallocating funds from “non-essential” government programs in the 2026 budget.
“Maybe they can use some of this again to help people meet their needs during this crisis,” said Mr. Barcelona. “But all this extended help must be conditional.”
“It would be better if this started earlier, if the President was given emergency powers earlier,” Mario “Mar” S. Valbuena, chairman of the Manibela transportation group, said in a phone call in Filipino. “The war has been going on for three weeks.”
He said lawmakers should consider revising the 28-year-old law that exempted the downstream oil industry, while also repealing the value-added tax on gasoline. “That would be a big help,” he said in Filipino.
The Philippines imposes an excise tax of P10 per liter of gasoline, P6 per liter of diesel and P5 per liter of kerosene under the 2017 Tax Reform for Acceleration and Inclusion law. It previously allowed the government to suspend the collection of excise duties on fuel when global oil prices hit $80 per barrel for three consecutive months, but that provision expired six years ago.
