Oil Tax Targeted in Philippine Presidential Race as Prices Surge
(Bloomberg) -- Some Philippine presidential aspirants are looking at either cutting or suspending taxes on oil, as fuel prices rise ahead of elections in May of next year.
Manila Mayor Isko Moreno on Thursday said he plans to cut taxes on oil and power by as much as 50%. Senator Ping Lacson called on the government to suspend excise taxes on oil, while former Senator Ferdinand Marcos Jr. asked for the same after a meeting with transport groups.
Energy Secretary Alfonso Cusi, in an interview with ABS-CBN News this week, said he raised with the Department of Finance the possibility of suspending excise taxes on oil. Finance Secretary Carlos Dominguez has yet to comment on the proposal, while the central bank has said the nation can accommodate oil price hikes without breaching its 2%-4% inflation target next year.
Oil companies in the Philippines -- a net energy importer -- raised prices this week, resulting in net increases year-to-date of domestic gasoline and diesel costs. Supply-side issues, mainly from food, have kept annual inflation above the central bank’s goal this year, adding pressure to households amid a slow economic recovery.
“Every major candidate has a populist agenda,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corp. in Manila, adding that inflation can be a major campaign issue. “But even without the elections, that would be requested. It’s something called for by the situation.”
©2021 Bloomberg L.P.