Even if government pushes through with the second round of excise tax increase on fuel, inflation will remain on target in 2019, Budget Secretary Benjamin Diokno said Friday.
Diokno said that with the P11 price drop on fuel products, the economic team decided to implement the second phase of excise tax adjustment on oil.
“We’re just going to implement what is in the law which is the second phase of a three-phased excise tax adjustment,” Diokno said in an interview over ABS CBN News Channel.
Diokno insisted that inflation would remain on target despite the implementation of the second phase of oil excise tax hike, quoting the Development Budget Coordination Committee (DBCC).
“We had an emergency meeting yesterday and Central Bank is part of DBCC, and we asked them for their views and they said inflation will still be on target despite the two-peso tax adjustment by next year,” Diokno said.
The DBCC has decided to recommend to President Rodrigo Duterte to push through with the second tranche of oil excise tax hike under the Tax Reform for Acceleration and Inclusion (TRAIN) law.
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Asked if the public would be surprised if prices will suddenly spike once the second round of increase pushes through in January, Diokno said the economic team is open to a review of their recommendation.
“Worst case, if we’re surprised, we review again,” Diokno said.
“There is a safeguard in the TRAIN law if you look at the information for three months or one quarter and we can recommend the adjustment,” he added. /muf