Econ­o­mists see need to sus­pend fuel tax hikes amid fast in­fla­tion

Panay News - - BUSINESS -

MANILA – The sec­ond round of in­creases in fuel ex­cise taxes sched­uled in Jan­uary 2019 should be sus­pended to ar­rest the im­pact of sky­rock­et­ing prices of com­modi­ties, which hit a fresh nine-year high last month, econ­o­mists said.

In­fla­tion ac­cel­er­ated fur­ther to 6.7 per­cent in Septem­ber from 6.4 per­cent in Au­gust weighed by the price in­creases in food items and fu­els.

Last month’s in­fla­tion print is also a fresh nine-year high, its fastest since Fe­bru­ary 2009 when it came in at 7.2 per­cent.

“In my opin­ion, there is a need to look into ‘sus­pend­ing’ the ex­cise tax stip­u­la­tion of TRAIN 1, not the en­tire TRAIN 1 as fuel cost af­fect most prices of ma­jor com­modi­ties,” in­de­pen­dent eco­nomic con­sul­tant John Paolo Rivera told GMA News On­line.

“The thing is, gaso­line com­pa­nies sim­ply pass the tax bur­den to the peo­ple... de­spite the in­crease in take home pay, the ad­di­tional tax bur­den is passed to con­sumers,” Rivera said.

The Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (TRAIN) law im­posed an ex­cise tax of P2.50 per liter on diesel and raised the levy on gaso­line to P7 from P4.35 per liter.

The ex­cise tax rate on diesel will go up to P4.50 next year and P6 per liter come 2020. For gaso­line, the levy will go up to P9 in 2019 and P10 in 2020.

The TRAIN, how­ever, has a per­ti­nent pro­vi­sion on the sus­pen­sion of fuel ex­cise taxes.

The law says that the sched­uled in­crease in the ex­cise tax on fuel shall be sus­pended when the av­er­age Dubai crude oil price based on Mean of Platts Sin­ga­pore (MOPS) for three months prior to the sched­uled in­crease of the month reaches or ex­ceeds $80 per bar­rel.

Like­wise, Univer­sity of Asia and the Pa­cific School of Eco­nom­ics dean Cid Terosa also sug­gested that the gov­ern­ment should “per­haps sus­pend the im­ple­men­ta­tion of in­di­rect tax hikes.”

The De­part­ment of Fi­nance has ear­lier said that it will be ready to ac­ti­vate the sus­pen­sion mech­a­nism for the next in­crease in Jan­uary 2019 should the price of Dubai crude keep go­ing up and the three-month av­er­age in the last quar­ter of this year hits $80 per bar­rel.

IN­FLA­TION AF­FECTS The faster rate of in­creases in the

POOR THE MOST prices of goods and services means weaker pur­chas­ing power, es­pe­cially for the poor, ac­cord­ing to econ­o­mists.

“In­fla­tion cuts the pur­chas­ing power of the poor, re­duces their op­tions, and hurts their eco­nomic wel­fare,” Terosa said.

For his part, Rivera said the poor are greatly af­fected by the high in­fla­tion rate as the items hit by in­fla­tion are food items, which are 60 to 70 per­cent of their house­hold bud­get,” Rivera said.

Data from the Philip­pine Sta­tis­tics Au­thor­ity showed that food in­fla­tion hit 9.7 per­cent, the high­est since March 2009.

“Higher in­fla­tion/prices tend to re­duce the pur­chas­ing power and spend­ing of house­holds/con­sumers, which ac­count for about 70 per­cent of the lo­cal econ­omy, thereby could lead to slower growth in de­mand for af­fected goods and services, as well as slower growth in the broader econ­omy,” Rizal Com­mer­cial Bank­ing Corp. head econ­o­mist Michael Ri­cafort said. “Higher in­fla­tion and weaker BA­COLOD City – Three cities in Ne­gros Oc­ci­den­tal won top prizes at the 2018 Pearl Awards of the De­part­ment of Tourism and As­so­ci­a­tion of Tourism Of­fi­cers in the Philip­pines (DOT-ATOP) held at Limketkai Luxe Ho­tel in Ca­gayan de Oro City on Fri­day night.

Sa­gay City was el­e­vated to the Hall of Fame af­ter win­ning Best Tourism Week/Month Cel­e­bra­tion in the City Cat­e­gory for three con­sec­u­tive years.

Sa­gay tourism officer He­len Javier Ar­guelles and her staff along with Pro­vin­cial Su­per­vis­ing Tourism Op­er­a­tions Officer Cris­tine

MANILA – Pump prices of petroleum prod­ucts are go­ing up for the ninth con­sec­u­tive weekly in­crease to­day, Tues­day, Oct. 9.

Pilip­inas Shell Petroleum Corp. ad­vised its cus­tomers that the prices per liter of diesel will go up by P1.45, gaso­line by P1.00, and kerosene by peso ex­change rate fun­da­men­tally led to higher lo­cal in­ter­est rates, which could have also in­creased the bor­row­ing/ fi­nanc­ing costs, thereby could have led to some slow down in bor­row­ings for new and ex­pan­sion projects by busi­nesses and for fi­nanc­ing the pur­chases of home, ve­hi­cles, and other big-ticket spend­ing by con­sumers and could slow over­all eco­nomic growth on the de­mand side,” Ri­cafort said. Apart from sus­pend­ing the next

IN­TER­VEN­TIONS round of fuel ex­cise taxes, econ­o­mists also sug­gest other in­ter­ven­tions to mit­i­gate and tem­per in­fla­tion.

“At this point the gov­ern­ment can think of di­rect in­ter­ven­tions such as sub­si­dies and cash trans­fers, cre­ate con­sump­tion chan­nels for the poor,” Mansinares re­ceived the award.

Sa­gay also won sec­ond place for Best Prac­tices on Com­mu­nity- Based Re­spon­si­ble Tourism for the “The Suyac Is­land Jour­ney: Coastal Com­mu­ni­ties Re­source Ad­vo­ca­cies to Boost Sus­tain­abil­ity” pro­gram.

Si­palay City was awarded anew as grand win­ner in Best Tourism Event (Sports) City Cat­e­gory for its Tourism Kite Fes­ti­val.

Ba­colod City placed third in Best Tourism Week/Month Cel­e­bra­tion City Cat­e­gory.

Last year, the prov­ince of Ne­gros Oc­ci­den­tal also made it to the Hall of P1.35.

The ad­just­ments will take ef­fect at 6: 00 a. m. on Tues­day, Oct. 09. Other firms have yet to an­nounce any ad­just­ment for the week.

Ex­clud­ing the in­crease for Oct. 8, the prices per liter of diesel have al­ready gone up by P13.50 in the year- to- date, gaso­line by P13.37, and kerosene by P12.71. Terosa said.

Ri­cafort said that the pri­or­ity bill on rice tar­if­fi­ca­tion will help in­crease im­ports of cheaper rice even at 35 per­cent tar­iffs, with­out cur­rent rice im­port vol­ume lim­i­ta­tions as pro­posed, in an ef­fort to in­crease lo­cal sup­ply of cheap rice and re­duce rice prices.

“Ad­di­tional gov­ern­ment pro­pos­als to im­port other food items that are have sup­ply short­ages lo­cally in­clude sugar, corn, fish, and other vegeta­bles to aug­ment lo­cal sup­ply and help bring down prices and help ease in­fla­tion/ higher prices that ad­versely im­pact the masses/poor,” Ri­cafort said.

Like­wise, Land Bank of the Philip­pines mar­ket econ­o­mist Guian An­gelo Du­mala­gan said that the gov­ern­ment needs to ini­ti­ate

Fame for Panaad sa Ne­gros Fes­ti­val, which was hailed Best Tourism Event-Pro­vin­cial Fes­ti­val cat­e­gory for three straight years -- in 2014, 2015, and 2016.

Mansinares lauded the win­ning lo­cal gov­ern­ment units as all of the en­tries from Ne­gros Oc­ci­den­tal made it to the top three.

“May they con­tinue to in­spire other lo­cal­i­ties to push for ex­cel­lence in their tourism ac­tiv­i­ties and pro­grams,” she said.

The best tourism prac­tices recog­ni­tion was launched in 2005 in Ba­colod City. ( PNA)

As of this post­ing, other oil com­pa­nies have yet to is­sue their re­spec­tive an­nounce­ments on fuel prices.

Ac­cord­ing to data from the De­part­ment of En­ergy, the prices per liter of gaso­line now range from P52.55 to P66.35, diesel from P45.65 to P54.90, and kerosene from P49.82 to P59.95. ( News)

GMA

AP

A gas sta­tion at­ten­dant in Metro Manila re­fu­els a car. In­fla­tion ac­cel­er­ated fur­ther to 6.7 per­cent in Septem­ber from 6.4 per­cent in Au­gust weighed by the price in­creases in food items and fu­els.

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