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Friday, March 29, 2024

Oil price rollback, VAT-free drugs up

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Double good news for 2019.

Fuel prices are likely to go down by more than P1 per liter next week while power rates are also expected to go down in January.

An industry source said the more than P1 per liter rollback was “for both products [gasoline and diesel].”

“Reasons [of the rollback] are strengthening of the peso, oversupply concerns, and US stock market,” the source said.

At the same time, medicines for diabetes, high cholesterol, and hypertension will be cheaper starting January 1 when a provision in the Tax Reform for Acceleration and Inclusion Law exempting such drugs from the value-added tax takes effect.

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In a Facebook post, the Department of Finance announced that starting on Tuesday, VAT will no longer be imposed on medicines prescribed for diabetes, high cholesterol, and hypertension.

The Section 109 of the Tax Reform for Acceleration and Inclusion law identifies the drugs and medicines exempted from VAT.

The Bureau of Internal Revenue issued the Revenue Regulation No. 25-2018 dated Dec. 21, which laid out the rules for the VAT-exempt status of medicines for diabetes, high cholesterol, and hypertension.

“The exemption from VAT provided herein shall apply to the sale by manufacturers, distributors, wholesalers, and retailers of drugs and medicines prescribed for the treatment and/or prevention of diabetes, high cholesterol and hypertension starting January 1, 2019,” the BIR issuance said.

Meanwhile, Meralco spokesperson Joe Zaldarriaga said customers can expect power rates to go down at the start of the year due to lower capacity fees from power generators arising from fewer power outages.

“Hopefully there will be another reduction in January…if we will use historical records as basis, normally rates are lower in January,” Zaldarriaga said.

Zaldariagga said the January rates would still have to factor in the final computation from generators and the transmission operator. 
These would reflect such factors as the exchange rate and the supply-demand situation, which would also affect generation and transmission charges.

“Generators are given a particular outage allowance per year,” Zaldarriaga said, noting these are translated into capacity fees.
Capacity fees are determined through the annual reconciliation of outage allowances that is done at the end of each year under the contracts approved by the Energy Regulatory Commission.

“The generators have a capacity fee per year which is divided by the number of days that they are available,” he said.
For example, if power generators do not exceed their outage allowance, their capacity fees are already paid in full and would no longer be reflected for the month of January. 

The capacity fees from suppliers will normalize in the following month. 

Meralco, the country’s biggest power distributor with over six million customers in its franchise area, meanwhile, expressed readiness to provide 24-hour assistance during the upcoming New Year celebration. 

Zaldarriaga said all emergency crews would be on alert, especially on New Year’s Eve to ensure that the utility firm will be able to respond to any issue or contingency. 

He said that this early, they already have contingency measures in place in case facilities get affected by pyrotechnics and firecracker explosions. 

Zaldarriaga advised all Meralco customers to observe utmost safety, as caution is still the best safety tip during the upcoming holiday. 

“We advise the general public not to play with firecrackers and pyrotechnics near our facilities, most especially electric lines, and transformers because this may cause power interruptions and even result in accidents,” he said. 

“Confetti, party-poppers, and balloons can also cause electric trouble, so it would be best to use them in open spaces and far from our facilities,” Zaldarriaga reminded the public.

Zaldarriaga added that while Meralco regularly upgrades, modernizes and maintains its facilities to ensure that they are in top condition, overhead lines are still vulnerable to firecracker explosions, pyrotechnics, and other party items. 

In case of emergencies, Meralco customers can call Meralco’s 24-hour call center at 16211. 

“Our call center is ready to respond to customers’ need at any given time. Its service is available 24/7,” Zaldarriaga said.

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