“Suspendihin ang excise tax sa petrolyo”— Bam Aquino urges gov’t to use TRAIN Law safeguard amid Iran crisis

MANILA — Senator Bam Aquino on Monday called on the government to suspend the excise tax on petroleum products, citing a provision under the Tax Reform for Acceleration and Inclusion Law or TRAIN Law that allows such action when global oil prices surge.

Aquino said the law provides a safeguard mechanism: excise taxes on fuel may be suspended when the average Dubai crude oil price breaches the $80 per barrel threshold for three consecutive months. The provision was designed to cushion consumers from sharp spikes in global oil prices.

His appeal comes amid heightened tensions involving Iran, a major oil-producing nation. Geopolitical instability in key oil-producing regions often disrupts supply and triggers volatility in global crude prices, affecting oil-importing countries like the Philippines.

What is the TRAIN Law?

The TRAIN Law, or Republic Act No. 10963, took effect in 2018 as the first package of the government’s comprehensive tax reform program. It lowered personal income taxes for most Filipino earners while increasing excise taxes on petroleum products, automobiles, coal, and sugar-sweetened beverages. Revenues from the measure were earmarked to fund infrastructure projects and social services.

However, the law also recognizes the impact of global oil price shocks on consumers. To mitigate inflationary pressures, it includes a provision allowing the suspension of fuel excise taxes when global crude prices exceed the set benchmark.

How oil price hikes affect Filipinos?

The Philippines relies heavily on imported oil. When global supply tightens — whether due to conflict, production cuts, or sanctions — prices typically rise as demand outpaces available supply.

Higher fuel costs have a ripple effect across the economy. Transport operators often petition for fare hikes to offset rising diesel prices, affecting jeepney and bus commuters. Increased logistics and production costs can also drive up the prices of basic goods in public markets and supermarkets.

Philippines may not be directly involved in overseas conflicts, their economic impact can be felt domestically through higher fuel and commodity prices.

📷 Bam Aquino FB