ILOILO CITY — Senators Grace Poe, JV Ejercito and Nancy Binay pushed for the suspension of the excise tax on fuel brought about by the Tax Reform for Acceleration and Inclusion (TRAIN) to arrest the rising inflation rate.
Poe noted that the Philippine inflation rate reached a five-year high at 4.5 percent in April 2018, which is higher than the government’s inflation target range of 2 percent to 4 percent for the whole year.
“Our inflation rate increased by more than four percent and there is a prediction that by early July, there will be a six percent inflation rate,” she said in a media interview.
The TRAIN law provides new sources of tax collection for the government, such as excise taxes on oil products, automotive vehicles, and sugar-sweetened beverages.
Earlier, Presidential Spokesperson Harry Roque said that excise taxes will be suspended if oil reaches USD80 per barrel.
But the Department of Finance said that when fuel prices hit USD80 a barrel, under the new tax reform law, can only suspend further tax rate increases, not stop the collection of excise tax.
“I don’t understand why they would say that because for me, our law has a safeguard which it states that when fuel prices reach 80 dollars per barrel, it (excise tax) could be suspended,” she said.
Poe, chairperson of the Senate committee on public services, conducted a public hearing in this city Friday, tackling the effects of the tax reform program on public services and utilities.
The two-hour public hearing gathered insights and concerns on the effects of TRAIN law to the transport groups, water firm and power firm.
During the hearing, Edgar Salarda, President of the Pinagkaisang Samahan ng mga Tsuper at Operator Nationwide (PISTON) in Panay island, noted that the oil prices here increased 18 times since January this year.
He said as of the moment, diesel fuel costs PHP43.44; premium,PHP52.57; and unleaded costs PHP52.12.
Also, the Panay Electric Co. (PECO), which services power in Iloilo City, noted an increase in its rates since they are dependent on fuel and coal.
Marcelo Cacho, Information Officer and Admin Officer of PECO, said that before the TRAIN law came in, they have an average rate of PHP10.59 per kilowatt hour (kWh).
“As of April, after the TRAIN (law) came in and the rise in global oil prices and coal prices, we are at PHP11.6 (kWh),” he said.
Cacho said that the TRAIN law contributed around 30-40 cents on the increase.
Senator Ejercito called on government economic managers to suspend the TRAIN law, also to address the rising inflation rate.
“The economic managers should seriously review the TRAIN law given the upward trend of the numbers. They should assess whether the increase in inflation is still manageable. Otherwise, implementation of TRAIN 1 should be suspended and studies,” he said in a press conference after the hearing.
Meantime, Binay said that they will “seriously study” in the Senate if they could bring back the safety net “that is if the threshold reached 4 percent, automatically the implementation of excise tax will be suspended.” (PNA)
