DOF: Gov’t has measures to ease impact of oil prices

The Tax Reform for Acceleration and Inclusion (TRAIN) Law allows the suspension of fuel excise tax increases but only under specific conditions, the Department of Finance (DOF) said.

It stressed that the government has an array of measures to mitigate the effect of rising oil prices triggered by the escalating cost of petroleum in the world market.

Finance Undersecretary Karl Kendrick Chua assured the public that social mitigation measures are in place to ease the impact on vulnerable sectors of fuel pump price increases, which are mainly the result of rising crude oil prices in the world market and not of the TRAIN Law.

Chua said “the DOF does not have any plans on immediately suspending the increased rates of excise taxes on petroleum products for 2018, as this is not the mechanism sanctioned by law.” “The suspension measure only takes effect when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) for three months preceding the scheduled increase reaches or exceeds $80 per barrel,” Chua said in response to calls for the suspension of the excise tax increase.

“As the global price of oil has unexpectedly increased, the DOF and the Department of Energy (DOE) are closely monitoring the price of petroleum products in the Philippines,” Chua said.

“Should the price of Dubai crude keep going up and the three-month average in the last quarter of this year hits 80 dollars per barrel, we will be ready to activate the suspension mechanism for the next increase in January 2019,” he said.

According to Chua, the most important thing is that the public is protected by way of mitigating measures such as social grants in the form of the Unconditional Cash Transfer (UCT) and fuel vouchers.

The Department of Social Welfare and Development (DSWD) has so far released some P4.3 billion to the Land Bank of the Philippines for some 1.8 million Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries with existing LandBank cash cards. Another 2.6 million household beneficiaries are in the process of getting their cash subsidies in May and June. For 2018, some P24 billion will be released to cover the poorest 10 million households.

For this year, UCT beneficiaries will receive P200 a month, which will increase to P300 a month in 2019 and 2020, Chua said.

In addition, the DOE and major petroleum companies such as Pilipinas Shell, Phoenix Petroleum and Petron agreed last March to provide fuel discounts for public utility vehicles (PUV) drivers, while DOTR is preparing the fuel vouchers for duly-franchised PUVs, Chua said. /