SINCE last year, it has really seemed like a Divine blessing to the Philippines and the economy that oil prices have gone down by half. Because we are dependent on imported oil and oil products, the benefits of lower global crude-oil prices go throughout the economy, from the largest conglomerate to the individual tricycle driver. Lower oil prices are a big deal.
Remember a month or two ago when a global report came out saying that the Philippines was the top nation in the world that would benefit from lower oil prices? The government cited this factor to present a rosier picture of economic growth for 2015 and raised its projected forecast.
Now the government is singing to a different tune. The National Economic and Development Authority (Neda) says that the government should study raising the excise tax on oil, thereby taking away from all of us part of the benefits of lower oil prices.
Neda Director General and Economic Planning Secretary Arsenio M. Balisacan said the Bureau of Customs (BOC) may lose P40 billion in revenues this year due to the cheaper oil prices. While we can appreciate that the BOC collections may be lower, Customs is not “losing” anything. What it means is that Filipinos will be paying P40 billion less for oil customs duties than they did last year. Why does the government always think that it is its money in the first place?
“This should be designed in a way that the benefits of declining oil prices are shared between the government and the private sector,” Balisacan said.
Our first response to that idea is, “Why”? Is not the government also benefiting just like we are from lower gasoline prices? What obligation do the people have to share the benefits with the government? We wonder if the Neda suggested that the government lower the excise tax and share the benefits with the people when oil prices were above $100 for several years?
The Neda also said, “The government must also take advantage of the current low oil-price regime in a way that would encourage more investors to come to the Philippines.” So, the government is going to encourage more foreign investments by artificially increasing the price of oil through raising taxes and the price of gasoline. Perhaps, that idea needs rethinking.
However, we will not blame the Neda for this wrongheaded idea. It actually comes from the Asian Development Bank (ADB). ADB Philippines Country Director Richard Bolt said the Philippines can increase taxes in favor of obtaining more resources for social spending.
That is the absolute best example of government believing that it can spend your money better and more wisely than you can.
Maybe lower oil prices will mean a person will now be able to buy a new car. Maybe low prices will provide the financial resources for a company to expand and create more jobs.
Perhaps, this idea of raising taxes on oil should be studied for a very long time, and then discarded.
1 comment
nah stupid idea that wont see the light of day….with ab noy’s rating taking a beating, he’ll be a complete eeediot and moron to push this.