Suspension of fuel excise tax, detrimental to economic recovery — DOF

Maris Federez   •   October 28, 2021   •   252

 

MANILA, Philippines — The Department of Finance (DOF) expressed before the House Committee on Energy its opposition to the proposed suspension of excise tax on petroleum products.

The DOF warned that suspending the imposition of excise tax on fuel will cost the government about Php131.4 billion in revenue for 2022 which, according to the agency, is detrimental to economic recovery.

“The unrealized public spending and the investments from the foregone revenues will also be detrimental to our economic recovery and long-term growth,” said DOF director Euvimil Nina Asuncion.

Asuncion said that providing a targeted subsidy to the transportation sector will be more equitable than removing all fuel excise taxes which may only subsidize the consumption of higher-income households.

The Department of Energy (DOE), however, estimated suspending the excise tax on petroleum products will lower pump prices by about Php8 to Php10 per liter.

“We specifically proposed the suspension of the excise tax because of the urgency in addressing the plight our kababayans,” said DOE Secretary Alfonso Cusi.

House Committee on Energy chairperson Representative Juan Miguel Arroyo confirmed that he will push for the amendment of oil deregulation law and the suspension of the imposition of excise tax on fuel products. —/mbmf (from the report of UNTV Correspondent Nel Maribojoc)

DOE exploring mangrove’s potential in managing carbon dioxide emissions

Robie de Guzman   •   December 2, 2021

 

MANILA, Philippines – The Department of Energy (DOE) on Thursday said it is looking into the potential of mangrove sequestration in managing carbon dioxide (CO2) emissions from coal-fire power plants as part of the Philippines’ commitment to successfully realize the energy transition without sacrificing energy security.

In a statement, the DOE said Energy Secretary Alfonso Cusi has issued a memorandum directing the Energy Policy and Planning Bureau to examine existing studies, or submit its own study on the “possibility of putting up mangroves for CO2 emission reduction from coal-fired power plants”; and seek technical assistance from development partners for such a study.

“The study, if proven, could help the Philippines in fulfilling the CO2 requirements without sacrificing our goal to achieve energy security given our energy-neutral portfolio,” Cusi said in his memo dated November 24.

With the global community racing to find ways to curb the adverse impact of climate change on the planet, the DOE said mangroves continue to gain scientific interest due to their ability to stockpile significant amounts of carbon in their wood and soil, instead of releasing it back into the atmosphere.

“We recognize the need to attain our energy security in a sustainable manner,” Cusi said.

“However, while there still is a percentage of our power needs that is being provided by coal, we should actively explore the potential of out-of-the-box solutions that could reduce the harmful greenhouse gas emissions of coal plants,” he added.

The Philippines has earlier urged the international community to start implementing actions on the fulfillment of the nations’ commitments and obligations to humanity to save the planet from environmental catastrophe.

P3B revenues collected from pork imports under reduced tariff, increased MAV system

Robie de Guzman   •   November 23, 2021

MANILA, Philippines – The Bureau of Customs (BOC) has posted collections amounting to P3 billion from swine meat imports under a reduced tariff system, the Department of Finance (DOF) said.

In a statement, the DOF said that the BOC reported 197 million kilograms (kg) of pork imports from April 7 to Nov. 12 this year.

However, the bureau estimated that it has foregone some P3.4 billion in revenues as of November due to the decreased tariff scheme.

The reduced tariff system was implemented in the second quarter of this year to boost the supply of pork and stabilize its retail prices in the domestic market.

To recall, President Rodrigo Duterte had issued a series of executive orders (EOs) that took effect starting April 7 to lower pork import tariffs and increase the allowable import volumes of the meat to help stabilize the domestic supply and prices of this food staple for the benefit of Filipino consumers.

Executive Order (EO) No. 128, which lowered pork import tariffs to 5 percent within its minimum access volume (MAV) and 15 percent outside MAV for the first three months, was in effect from April 7 to May 14.

EO 134, which superseded EO 128, set tariffs on pork imports under the MAV to 10 percent for the first three months, and 15 percent in the next nine months.

For imports outside the MAV, the tariffs are 20 percent for the first three months and 25 percent in the succeeding nine months.

The one-year effectivity of EO 134 began on May 15, 2021.

“To compute for the effect of the two EOs, we multiplied the dutiable value of meat by 25 percent—less 5 percent and 15 percent—which were already paid for EO 128, and multiply the dutiable value by 20 percent and 15 percent for EO 134. The result showed a revenue loss of P3.4 billion,” BOC Commissioner Rey Leonardo Guerrero said during a recent meeting with DOF.

Guerrero said the volume of pork imports started spiking in March and continuously grew in April to May, but dropped starting June.

The volume of pork imports in April, the month when the two EOs took effect, grew 500.46 percent, from 4.07 million kg in the same month last year to 24.45 million kg.

“This dramatic increase in pork import volumes continued in May, when a total of 36.5 million kg entered the country, representing a 506-percent hike from the 6.02 million kg imported during the same period in 2020,” the BOC said.

In June, the bureau said that pork imports reached 33.62 million kg, which was 531.39 percent more than the 5.32 million kg brought into the country during the same period last year.

“Pork imports continued its steady drop in July, when volumes totaled 31.18 million kg, which was 370.4 percent more than the 6.63 million kg, recorded in the same month of 2020,” it added.

The agency also noted that in August, pork imports increased 271.59 percent year-on-year, and dropped to 164.55 percent in September and 78.47 percent in October.

The volume of pork imports was 6.41 million kg in August 2020 and 23.82 million kg in August 2021; 9.73 million kg in September 2o20 and 25.73 million kg in September 2021; and 10.85 million kg in October 2020 and 19.36 million kg in October 2021.

From November 1-12, pork imports of 7.47 million kg were lower by 11.64 percent compared to last year’s 8.46 million for the same period.

Suspension of fuel excise tax ‘detrimental’ to PH economic recovery – DOF

Robie de Guzman   •   November 15, 2021

MANILA, Philippines – The proposed suspension of excise taxes amid rising fuel prices will be inequitable and will threaten the country’s recovery and growth prospects, the Department of Finance (DOF) said Monday.

DOF Undersecretary and chief economist Gil Beltran issued the statement following calls by some groups for the suspension of fuel excise taxes after prices of petroleum products spiked for several consecutive weeks.

“The unrealized public spending and investments from the foregone revenues will be detrimental to our economic recovery and long-term growth,” Beltran said.

“A more equitable way to address the impact of higher fuel prices is to provide targeted support to the vulnerable groups, particularly the transportation sector, which the government has already committed to do,” he added.

The DOF estimates that suspending all fuel excise taxes and value-added tax (VAT) on fuel excise will result in foregone revenues amounting to P147.1 billion or around 0.7 percent of the gross domestic product (GDP) in 2022.

If the tax suspension covers only the fuel excise taxes and the VAT on fuel excise under Republic Act (RA) No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the government is estimated to lose P119.5 billion or around 0.5 percent of GDP in the same year, it added.

While consumption will be slightly higher at an estimated incremental of 0.6 to 0.7 percentage point, growth will actually be lower by 0.1 to 0.2 percentage point, if the excise tax and VAT on it are suspended, the department further stated.

Beltran also stressed that higher income households are estimated to benefit from the suspension more than lower income households.

“With the suspension of fuel excise taxes, we will lose the improvements we made under TRAIN in making the tax system more equitable, in which those who are more financially capable pay more taxes,” he said.

The DOF noted that higher income households are estimated to benefit 60 percent more than lower income households from the suspension of fuel excise taxes.

With the tax relief that would accompany the suspension of fuel excise taxes, the disposable income of the top 10 percent of households is estimated to increase by around 0.63 to 0.82 percent on average in 2022, it added.

Meanwhile, the disposable income of the bottom 50 percent of households is estimated to increase by only around 0.34 to 0.45 percent.

Beltran said a more equitable way to address the impact of higher fuel prices is to “provide targeted support to the vulnerable groups, particularly the transportation sector.”

The government earlier said it will release P1 billion fund for cash grants to 178,000 public utility vehicle drivers for the remaining months of the year through the Land Transportation Franchising and Regulatory Board (LTFRB).

Once spent, the cash grants are estimated to result to an incremental P2.9 billion pesos-worth of growth in the economy, the DOF said.

REACH US

The Philippine Broadcast Hub

UNTV, 915 Barangay Philam,

EDSA, Quezon City M.M. 1104

(+632) 8396-8688 (Tel)

info@untv-newsandrescue.com (General inquiries)

ABOUT UNTV

UNTV is a major TV broadcast network with 24-hour programming. An Ultra High Frequency station with strong brand content that appeal to everyone, UNTV is one of the most trusted and successful Philippine networks that guarantees wholesome and quality viewing experience.