Press Release
December 5, 2018


Sen. Chiz Escudero has urged President Rodrigo Roa Duterte to reconsider the implementation of the second tranche of excise tax on fuel, or at least consider its immediate suspension when inflation becomes uncontrollable again anytime in 2019.

"It is best to suspend the implementation of the second tranche of fuel excise tax right away or that the suspension be swift in 2019 so as to effectively address inflation, before it again directly affects the lives of every Filipino," Escudero said in Senate Resolution No. 964, which he filed on Wednesday.

Inflation already reached a nine-year high in September at 6.7 percent.

The administration's financial and economic managers projected last October that the price and multiple estimates of crude oil from Dubai would stay at an average price above the $80 per barrel threshold for the next two months. However, the price of Dubai crude oil has gone down in November.

"Considering the previous erroneous projection in October, certainty becomes nil at best and no assurance can ever be had either by the President or the public itself that high prices of goods and services will never happen, not to mention the fact that election spending will definitely exacerbate inflation in 2019, an election year, where demand-pull inflation may likely occur," the senator said.

According to Escudero, postponing the next round of increase in excise tax on fuel will unburden consumers who are already affected by the high price of goods due to the oil tax hike this year.

Under Section 43 of Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law, the implementation or suspension of the excise tax on fuel depends upon the recommendation of the Department of Finance (DOF) and the Development Budget Coordination Committee (DBCC) to the President.

The President announced in October that he will temporarily suspend the second tranche of the fuel tax rate increase if the price per barrel would hit $84--a mitigating measure provided for under the train law.

However, on December 4, upon the recommendation of his financial and economic managers, the Palace announced that the government would proceed with the implementation of the second tranche of fuel tax increase beginning January 2019.

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