The Senate Energy Committee is working to prevent premature increases in electricity and fuel prices as a result of the new excise tax rates imposed by RA 10963, the Tax Reform for Acceleration and Inclusion Act, according to its chairman Senator Win Gatchalian.
Gatchalian said that a legislative inquiry was necessary to monitor and evaluate electricity and fuel prices, as well as DOE’s efforts to prevent and deter possible abuses in the form of premature increases in generation charges and pump prices.
He noted that although DOE has issued guidelines to monitor oil reserve levels, similar guidelines for coal stocks have yet to be issued.
“Unfortunately, the increases in excise taxes on coal and fuel present the perfect opportunity for stealthy price gouging, because consumers are already expecting prices to increase anyway,” he said.
The senator said the hearing will help protect the hard-earned money of consumers from unscrupulous individuals who are trying to charge them too much, too soon for fuel and electricity.
Pursuant to Senate Resolution No. 581, which he earlier filed, the energy committee will conduct today (January 18) an inquiry into the existing inventories of coal and oil, to ensure that consumers are not being made to pay higher prices on old fuel and coal stocks which are not covered by the new excise taxes.
The resolution notes that Department of Energy (DOE) circulars have required oil-based generation companies, oil companies and bulk suppliers, and refiners to maintain a minimum 15 to 30 day inventory or in-country stock of petroleum products and fuels, while coal power plants must maintain a minimum 30-day coal running inventory.
Increases in electricity and fuel prices should only take effect once these old reserves have been depleted and new inventories, which should have entered the country after January 1, 2018, are already being used,” said Gatchalian.
Senator Nancy Binay, for her part, said that to mitigate the impact of the tax reform law, especially to poor families in the country, urged the Department of Budget and Management (DBM) and other government agencies to hasten the release of funds and implementation of programs
“I call on the DBM and other government agencies to fast-track the release of funds and implementation of the guidelines and programs meant to mitigate the effects of the tax reform law to poor families,” said Binay.
She said a total of P28.8 billion had been allocated in the 2018 national budget to offset the effects of the new tax measure.
The poorest 10 million Filipino households will receive a cash aid of P200 a month this year to soften the shock of increased prices of goods. The government has lodged P24.5 billion in the Land Bank of the Philippines (LBP) for this unconditional cash grant (UCT).
“If they can release the UCT by the end of January or first week of February, it would greatly help the people,” she said.
She noted that the increase in excise taxes on petroleum products and coal brought by the Tax Reform for Acceleration and Inclusion (Train) law could lead to higher prices of basic goods and electricity.
“Now that the law has been implemented, I hope that the government should immediately address the need of the poor families that would be affected by the increase of prices and electricity,” she said
Another P2 billion has been allocated to the National ID System program of the Philippine Statistics Authority (PSA), meant to limit leakages in the delivery of social services and ensure that services reach the intended recipients.
The immediate implementation of the National ID program, she siad, would ensure that the empty stomachs of the poor beneficiaries of cash grabts would be filled.
She said the Senate is ready to take on any proposal to ensure the removal of the quantitative restrictions on rice following DBM’s pronouncement that the rise in inflation could be countered by lowering rice prices through policy reforms.
“They say that TRAIN is one of the best gifts that the government can give to the Filipinos because of increase in take-home pay. But the gift would be better if its impact would be mitigated, especially to the poor.,” said Binay.
Critics of the Train Law said that the “biggest loser” in the implementation of the measure are the poor, which would be burdened by the increase of prices of goods and services brought about by the additional excise tax on oil and gasoline.
While exempting about 7 million employees earning P21,000 below from income tax, the Train Law imposes additional P8 per liter this year and P2 for the next year.
The increase, critics said, will trigger a domino effect on the prices of good and services. The cash grant will increase to P300 a month in 2019 and 2020.
