Temporary Suspension or Reduction of Excise Tax on Fuel

• - Senate Office of the & cretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session ) 26 MAR -3 P2:25 RECEIVED BY: SENATE 1922 Senate Bill No. _ Introduced by Senator JOEL VILLANUEVA AN ACT PROVIDING FOR THE TEMPORARY SUSPENSION OR REDUCTION OF EXCISE TAXES ON REGULAR GASOLINE, UNLEADED PREMIUM GASOLINE, AND DIESEL, AMENDING FOR THE PURPOSE SECTION 148 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED EXPLANATORY NOTE Global oil markets remain highly volatile due to geopolitical tensions, supply disruptions, and uncertainties in major oil-producing regions. Recent developments in the Middle East have once again heightened the risk of sharp increases in global crude oil prices. As a net oil-importing country, the Philippines is particularly vulnerable to these external shocks. Fuel price spikes do not affect transportation alone. They cascade across the economy, increasing food prices, electricity costs, logistics expenses, and ultimately inflation. The burden is felt most heavily by ordinary Filipino families, public utility drivers, farmers, fisherfolk, and small businesses. Under Republic Act No. 10963 or the TRAIN Law, excise taxes on petroleum products were rationalized as part of comprehensive tax reform to strengthen revenue generation and fiscal sustainability. While these taxes serve important fiscal objectives, extraordinary global circumstances call for calibrated and responsive mechanisms that balance revenue considerations with consumer protection. This measure therefore authorizes the President, upon recommendation of the Secretary of Finance and in consultation with the Secretary of Energy, to temporarily suspend or reduce the excise tax on gasoline and diesel when the average Dubai crude

oil price based on the Mean of Platts Singapore (MOPS) reaches or exceeds Eighty United States Dollars (USD 80) per barrel. Recognizing that excise taxation is fundamentally a fiscal instrument, this bill appropriately vests the recommending authority in the Department of Finance, which is best positioned to evaluate inflationary pressures, revenue implications, and macroeconomic stability. At the same time, consultation with the Department of Energy ensures that market conditions are properly assessed. Equally important, the proposed mechanism provides for the automatic lifting of such suspension once global oil prices stabilize, thereby preserving fiscal discipline and revenue predictability. This approach is neither a permanent tax repeal nor a purely automatic mechanism divorced from fiscal realities. Rather, it is a prudent, targeted, and temporary safeguard designed to cushion the impact of extraordinary global oil price shocks while maintaining responsible public finance management. In times of uncertainty, government must act with both compassion and prudence. This measure seeks to strike that balance. In view of the foregoing, the immediate passage of this bill is earnestly sought. JOEL VILLANUEVA

Dentale Office of the Secretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) MAR -3 P2:25 First Regular Session ) RECEIVED BY: SENATE 1922 Senate Bill No. _ Introduced by Senator JOEL VILLANUEVA AN ACT PROVIDING FOR THE TEMPORARY SUSPENSION OR REDUCTION OF EXCISE TAXES ON REGULAR GASOLINE, UNLEADED PREMIUM GASOLINE, AND DIESEL, AMENDING FOR THE PURPOSE SECTION 148 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 148 of the National Internal Revenue Code (NIRC)

2 of 1997, as amended, is hereby further amended by inserting a new subsection to read as follows: "SEC. 148. Manufactured Oils and Other Fuels. - There shall be collected on refined and manufactured mineral oils and motor fuels, the following excise taxes which shall attach to the goods hereunder enumerated as soon as they are in existence as such: XXX

SEC. 148-B. TEMPORARY SUSPENSION OR REDUCTION OF EXCISE

TAX ON PERTINENT PETROLEUM PRODUCTS. - (A) NOTWITHSTANDING THE PROVISIONS OF SECTION 148, WHEN PUBLIC INTEREST SO REQUIRES, AND UPON RECOMMENDATION OF THE SECRETARY OF FINANCE, IN CONSULTATION WITH THE SECRETARY OF ENERGY, THE

PRESIDENT OF THE PHILIPPINES MAY, BY EXECUTIVE ORDER, SUSPEND OR REDUCE THE EXCISE TAX IMPOSED ON REGULAR GASOLINE, UNLEADED PREMIUM GASOLINE, AND DIESEL FUEL OIL, WHEN THE AVERAGE DUBAI CRUDE OIL PRICE BASED ON THE MEAN OF PLATTS SINGAPORE (MOPS), OR SUCH OTHER INTERNATIONALLY RECOGNIZED BENCHMARK AS MAY BE DETERMINED BY THE DEPARTMENT OF FINANCE (DOF), REACHES OR EXCEEDS EIGHTY UNITED STATES DOLLARS (USD 80) PER BARREL. (B) THE RECOMMENDATION OF THE SECRETARY OF FINANCE SHALL BE BASED ON AN ASSESSMENT OF: 1. INFLATIONARY PRESSURES AND CONSUMER PRICE IMPACT; 2. FISCAL POSITION AND REVENUE IMPLICATIONS; 3. MACROECONOMIC STABILITY; AND 4. THE EXISTENCE OF EXTRAORDINARY GEOPOLITICAL EVENTS, SUPPLY DISRUPTIONS, OR ABNORMAL GLOBAL OIL MARKET CONDITIONS. (C) ANY EXECUTIVE ORDER ISSUED PURSUANT TO THIS SECTION SHALL SPECIFY THE DURATION AND EXTENT OF THE SUSPENSION OR REDUCTION. (D) THE SUSPENSION OR REDUCTION SHALL BE DEEMED AUTOMATICALLY LIFTED, AND THE EXCISE TAX RATES UNDER SECTION 148 SHALL AUTOMATICALLY RESUME TO THEIR STATUTORY LEVELS, WHEN THE AVERAGE DUBAI CRUDE OIL PRICE BASED ON MOPS FALLS BELOW EIGHTY UNITED STATES DOLLARS (USD 80) PER BARREL FOR A PERIOD OF AT LEAST THIRTY (30) CONSECUTIVE DAYS, UNLESS EARLIER REVOKED UPON RECOMMENDATION OF THE SECRETARY OF FINANCE. (E) THE DOF SHALL SUBMIT A REPORT TO CONGRESS WITHIN FIFTEEN (15) DAYS FROM THE ISSUANCE OF ANY

ISSUANCE OF ANY RECOMMENDATION UNDER THIS SECTION, DETAILING THE ECONOMIC AND FISCAL BASIS THEREOF."

SEC. 2. Implementing Rules and Regulations. - Within fifteen (15)

days from the effectivity of this Act, the DOF shall promulgate the necessary rules and regulations to effectively implement the provisions of this Act.

SEC. 3. Separability Clause. - If any portion or provision of this Act is

declared unconstitutional, the remainder hereof or any provisions not affected thereby shall remain in force and effect.

SEC. 4. Repealing Clause. - Any law, presidential decree or issuance,

executive order, letter of instruction, rule, or regulation inconsistent with the provisions of this Act is hereby repealed or modified accordingly.

SEC. 5. Effectivity. - This Act shall take effect immediately after its

complete publication in the Official Gazette or in a newspaper of general circulation. Approved,