Suspension or Reduction of Excise Taxes on Petroleum Products

Sentati Offire of the SerenD TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES First Regular Session MAR -9 P3:22 RECEIVED BY: SENATE S. No. 1940 Introduced by Senator FRANCIS N. PANGILINAN AN ACT AUTHORIZING THE PRESIDENT TO SUSPEND OR REDUCE EXCISE TAXES ON PETROLEUM PRODUCTS DURING NATIONAL OR GLOBAL ECONOMIC EMERGENCIES, AMENDING FOR THE PURPOSE SECTION 148 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED EXPLANATORY NOTE In 2024, the Philippines imported approximately 95 million barrels of liquid fuels - equivalent to about 340,000 barrels per day - comprising 99.68 percent of its total petroleum supply (DOE Oil Industry Management Bureau). As of September 2025, 97.8 percent of the country's oil imports originated from the Middle East region, underscoring the concentration of supply sources. As a net oil-importer, the Philippines remains vulnerable to global oil price movements, with corresponding effects on domestic fuel, transport, power, and commodity prices. Republic Act No. 10963 (TRAIN Law) imposed excise taxes on petroleum products as part of the government's revenue measures. It, however, granted the President only temporary authority to suspend scheduled tax increases from 2018 to 2020. No existing law empowers the President to suspend or reduce fuel excise taxes during ongoing national or global economic emergencies, limiting the government's ability to provide immediate fiscal responses. The urgency is evident in recent DOE projections: diesel prices may exceed P80 per liter if higher global oil prices are fully passed on to consumers, although staggered adjustments may temper the immediate impact. These developments underscore the need for a flexible mechanism to suspend or reduce fuel excise taxes when extraordinary events significantly disrupt global oil prices. Such measure would support timely relief, help ease inflationary pressures, and reduce cost burdens on Filipino consumers, particularly farmers, fisherfolk, transport workers, and small businesses.

Granting the President continuing authority to suspend or reduce fuel excise taxes during extraordinary circumstances would enable a timely policy response to exceptional oil price volatility and mitigate its impact on Filipino consumers. In view of the foregoing, the passage of this bill is earnestly sought. FRANCIS N. PANGILINAN

Saltair Office of the Serertarp TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES First Regular Session 26 MAR -9 P3:22 SENATE RECEIVED BY: S. No. 1940 Introduced by Senator FRANCIS N. PANGILINAN AN ACT AUTHORIZING THE PRESIDENT TO SUSPEND OR REDUCE EXCISE TAXES ON PETROLEUM PRODUCTS DURING NATIONAL OR GLOBAL ECONOMIC EMERGENCIES, AMENDING FOR THE PURPOSE SECTION 148 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, 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), as

2 amended, is hereby further amended to read as follows: XXX [For the period covering 2018 to 2020, the scheduled increase in the excise tax on fuel as imposed in this Section shall be suspended when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) for three (3) months prior to the scheduled increase of the month reaches or exceeds Eighty dollars (USD 80) per barrel.] Provided, That the Department of Finance shall perform an annual review of the implementation of the excise tax on fuel and shall, based on projections provided and recommendations of the Development budget coordination Committee, as reconciled from the conditions as provided above, recommend the implementation or suspension of the excise tax on fuel: Provided, further, That the recommendation shall be given on a yearly basis: Provided, finally, That any suspension of the increase in excise tax shall not result in any reduction of the excise tax being imposed at the time of the suspension. "THE PRESIDENT UPON THE RECOMMENDATION OF THE DEVELOPMENT BUDGET COORDINATION COMMITTEE (DBCC), IN CONSULTATION WITH THE SECRETARY OF ENERGY, MAY SUSPEND OR REDUCE THE EXCISE

TAXES ON FUEL THROUGH AN EXECUTIVE ORDER: PROVIDED, THAT THE AVERAGE DUBAI CRUDE OIL PRICE BASED ON MEAN OF PLATTS SINGAPORE (MOPS) FOR ONE (1) MONTH REACHES OR EXCEEDS EIGHTY DOLLARS (USD 80) PER BARREL: PROVIDED FURTHER, THAT THE SAID SUSPENSION OR REDUCTION OF EXCISE TAXES SHALL BE AUTOMATICALLY LIFTED WHEN THE ABOVE CONDITION IS NO LONGER PRESENT. PROVIDED, FINALLY THAT, WITHIN FIFTEEN (15) DAYS FROM THE ISSUANCE OF ANY RECOMMENDATION UNDER THIS SECTION, AND MONTHLY THEREAFTER WHILE IT REMAINS IN EFFECT, THE SECRETARY OF FINANCE, ON BEHALF OF THE DBCC, SHALL SUBMIT TO CONGRESS A REPORT ON THE BASIS FOR SUCH RECOMMENDATION.

SEC. 2. Separability Clause. - If any portion or provision of this Act is declared

unconstitutional, the remainder of this Act or any provisions not affected thereby shall remain in force and effect.

SEC. 3. 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. 4. Effectivity Clause. - This Act shall take effect after fifteen (15) days

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