MANILA, Philippines (UPDATED) – President Rodrigo Duterte approved the second round of diesel and gasoline excise tax hikes during the Cabinet meeting on Tuesday, December 4, Economic Planning Secretary Ernesto Pernia and Budget Secretary Benjamin Diokno said.
The meeting, ongoing as of posting, tackled the recommendation of Duterte’s economic managers to push through with the hike, to be implemented on January 1, 2019.
“He (Duterte) said he’ll sign it,” Pernia said when Rappler sought a confirmation.
Budget Secretary Benjamin Diokno also confirmed the approval to Rappler and provided an explanation of Duterte’s decision.
“Yes. Argument: he’s simply implementing the law. The sharp turnaround in world crude prices. From a peak of close to $80 per barrel to $68 per barrel in November 29, with Dubai Futures prices projecting further decline below $60 per barrel in 2019,” he said in a message.
He then projected that in January 2019, gasoline (95 octane) will be P50.82, “inclusive of P2 additional excise tax.”
The economic team had previously recommended suspending the hike but took it back only last Thursday, November 9.
Under the Tax Reform for Acceleration and Inclusion (Train) Law, the excise taxes on diesel and gasoline would be increased by P2 per liter effective January 1, 2019. It would also be hiked by another P1.50 per liter in 2020.
The Development Budget Coordination Committee (DBCC) said its recommendation to push through with the hike comes in light of the decline in world oil prices.
“Dubai crude oil prices have gone down by 14% from an average of $79 per barrel in October down to $68 per barrel so far in November,” said the DBCC.
The oil futures market projects oil prices to go down further to $60 per barrel in 2019.
Finance Secretary Carlos Dominguez III had also said the DBCC considered the “adverse impact” on revenues and expenditures for 2019 should the government suspend the hike. – Rappler.com