PCCI bucks high coal tax

Philippine Chamber of Commerce and Industry (PCCI) said that being already poorly situated in terms of power costs competitiveness, it is important for the Philippines to give priority to the prevention or avoidance of any cause that will increase the cost and diminish the quality of our power industry.

“In brief, any cause or policy that would not promote that premise must be avoided,” PCCI said, in response to Senate's inclusion of a coal tax in the Tax Reform for Acceleration and Inclusion Act (TRAIN) orSenate Bill 1592.

To be specific, the government wants to increase the excise tax for coal from R10 per metric ton to R300 in phased implementation.

“The narratives relating that 'the resulting increase is not really as high as being projective by some sectors or that the increase is really too miniscule compared to other processes affecting increase in power cost or that, after all, the excise tax on coal has not been touched for some years,' somehow, point the issue away from the core premise that any increase in our already uncompetitive power cost should be avoided,” PCCI said.

PCCI said that the country is yet to reach its full economic potential and a pending increase in coal tax could drive investments away, preventing an inclusive economic growth from happening.

“We now enjoy this rare opportunity when our country is catching the eye of international business community, so let us not rock the boat, as it were, by tinkering and erroneously demeaning the impact of any increase in our power cost,” PCCI said.

At the Philippines’ US$3,017 per capita GDP, we are behind even with Indonesia at US$3,600 and definitely quite far behind Thailand at US$6,034 and Malaysia at US$ 9,464. Singapore and Brunei Darussalam are way above in the region.

Within ASEAN, Philippines has one of the highest unemployment rate of 5.5 percent of the population; the second highest poverty level with 22 percentof the population below poverty line (the latest SWS survey reported that 10.9 million families self-admitted as being poor), and we rank as the 3rd lowest in secondary education enrolment at 60.5 percent of the population.

“This is a bird-eye’s view of the challenge to achieve full-circle inclusiveness before us,” PCCI said. (MBM)

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