Philippine House Approves Bill Granting President Emergency Power to Suspend Oil Excise Tax
The House of Representatives of the Philippines has approved House Bill No. 8418 on its third and final reading, granting President Ferdinand "Bongbong" Marcos Jr. the authority to temporarily reduce or suspend excise taxes on petroleum products during national or global economic crises. The measure received overwhelming support with 247 votes in favor, only three against, and no abstentions.
Objectives and Provisions of the Bill
According to House Majority Leader Ferdinand Alexander "Sandro" Marcos, the primary goal of this legislation is to provide immediate relief to the public when international oil prices surge, leading to increased costs for transportation, food, and electricity. Under the proposed law, the President can eliminate up to P10 per liter in excise tax on gasoline and P6 per liter on diesel if crude oil prices reach or exceed $80 per barrel or if a national emergency or calamity is declared.
The suspension or reduction of these taxes can last for a maximum of six months, and the President's authority to exercise this power extends until December 31, 2028. This timeframe allows for flexible responses to volatile market conditions over the coming years.
Support and Reservations from Lawmakers
Akbayan Party-list Representative Chel Diokno voted in favor of House Bill No. 8418, emphasizing that rising oil prices have created a domino effect, driving up costs for essential goods like food and transportation. However, Diokno expressed two key reservations: maintaining vigilance over the granting of emergency powers to the President and insisting that suspending excise taxes alone is insufficient without immediate aid for severely affected sectors.
Diokno's party is advocating for additional measures, including House Resolution No. 858 for free train rides, House Resolution No. 873 to expand fuel subsidies for delivery riders and tricycle drivers, and House Resolution No. 875 to review the Philippine Energy Plan. These proposals aim to complement the tax suspension with broader support mechanisms.
Opposition and Alternative Proposals
Among those who voted against the bill were Kabataan Party-list Representative Renee Co, Gabriela Party-list Representative Sara Elago, and ACT Teachers Party-list Representative Antonio Tinio. Co argued that the bill fails to address the root causes of persistently high oil prices, as it focuses solely on tax reduction rather than reforming policies in the oil sector.
Co pointed out that even with potential price reductions of P6 to P10 per liter, consumers might not feel the benefits due to the deregulated nature of the oil industry and a lack of transparency in pricing. Instead, she advocated for permanently removing excise taxes and value-added taxes on oil and basic goods, coupled with stricter regulation of the downstream oil industry, centralized procurement, and enhanced renewable energy development to reduce dependence on imported oil.
Implications and Future Steps
The passage of this bill marks a significant step in the government's efforts to cushion the economic impact of fuel price fluctuations. By empowering the President with emergency fiscal tools, lawmakers aim to provide timely relief during crises. However, debates continue over whether this approach adequately tackles underlying issues in the energy sector or if more comprehensive reforms are necessary to ensure long-term stability and affordability for Filipino consumers.
