Gatchalian says fuel excise freeze should be last resort

SENATOR Sherwin T. Gatchalian on Thursday said the suspension of fuel excise taxes under the tax reform law should be a last resort in dealing with rising prices of goods and services.

“We are studying the issue carefully. That will be the very last suggestion that we will make because revenues are very important to the government, especially in 2019 where all of these excise tax will be used for the Build, Build, Build program,” he said in an interview with CNN Philippines’ The Source when asked if he was in favor of such suspension.

“And admittedly, we will need to raise our infrastructure spending to about 6% of GDP. We’re about hovering around 4.5% so just to catch up in order to address traffic and to have good airport and subway, we need to raise it to about 6% of GDP,” he added.

Mr. Gatchalian, chair of the Senate committee on economic affairs, said the fuel excise tax also helps finance free higher education and the increased salaries of uniformed personnel. He said there were other unforeseen events, such as the rise of oil prices and the depreciation of peso, that contributed to inflation.

According to the Philippine Statistics Authority (PSA), inflation rate hit a nine-year high at 6.4% in August.

The senator said it was about time for the economic managers to detail a unified strategy for curbing inflation with the planned executive order on importation policies.

“It’s about time. There were efforts in the past but it’s a hodgepodge of different counter inflationary measures. The economic managers should really talk to each other instead of different departments doing different things,” he said.

The President should also fix the government’s policy on the supply of rice, move for the abolition of the National Food Authority (NFA), and push for the passage of the rice tariffication bill, he added.

“If we have rice tariffication program, then there is no more logic to maintaining the NFA because the private sector will now import rice, the market will stabilize supply and demand, and even pricing, and the government will still monitor and regulate their activities,” he said.

Republic Act 10963 or the Tax Reform Acceleration and Inclusion (TRAIN) law imposes an excise taxes on gasoline and diesel to P7 per liter and P2.50 per liter, respectively.

The law also provides a suspension provision on the scheduled increase of fuel excise taxes if the average Dubai crude oil price for three months prior to the scheduled increase reaches or exceeds $80 per barrel.

Senators Grace S. Poe-Llamanzares, Joseph Victor G. Ejercito, and Paolo Benigno A. Aquino IV earlier called for the suspension of fuel excise taxes under the tax reform law due to the increasing prices of goods and services.

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