As global oil prices threaten to surge amid the escalating tensions in the Middle East, lawmakers on Tuesday moved to give President Ferdinand Marcos Jr. a powerful tool to cushion the blow on Filipino consumers.

The House Committee on Ways and Means approved a substitute bill that would authorize the President to temporarily suspend or reduce the excise tax on petroleum products when global oil prices rise sharply.

The measure consolidates 15 bills and two joint resolutions, including House Bill 8292 filed by Speaker Faustino Dy III and Ilocos Norte Rep. Sandro A. Marcos. Their proposal would grant the President temporary authority to suspend the fuel excise tax during national or global economic emergencies.

Also folded into the substitute bill is House Bill 5779 authored by Leyte Rep. Martin Romualdez which proposes the removal of the fuel excise tax by amending the Tax Reform for Acceleration and Inclusion Law.

Committee chair Marikina Rep. Miro Quimbo declared the measure approved after Manila Rep. Rolando Valeriano, a panel vice chair, moved for its adoption. No member raised an objection.

Valeriano also moved for the approval of the committee report and its immediate filing with the House Bills and Index Service, clearing the path for the proposal to reach the plenary for debate.

Triggered by global spikes

Under the proposed amendment to the National Internal Revenue Code, the President may suspend or reduce the excise tax on petroleum products on the recommendation of the Development Budget Coordination Committee (DBCC) in coordination with the Department of Energy.

The DBCC includes the Department of Budget and Management, Department of Finance, Department of Economy, Planning and Development, and the Office of the President, with the Bangko Sentral ng Pilipinas serving as adviser.

The authority could be triggered when the average Dubai crude price based on the Mean of Platts Singapore hits or exceeds $80 per barrel for one month prior to the suspension order.

It may also be invoked if the President declares a national emergency or calamity that causes extraordinary spikes in domestic fuel prices, subject to certification by the Energy secretary.

If exercised, the President may order either a full suspension or a partial reduction of excise taxes on specific petroleum products.

The suspension would last for up to six months, with a possible extension to a maximum aggregate period of one year, subject to congressional action. The authority itself would expire on 31 December 2028.

Reporting safeguards

To ensure transparency, the measure requires the President — through the finance secretary — to submit a report to Congress within 15 days after issuing a suspension order and every month thereafter.

The report must detail the factual basis for the move, the estimated foregone revenues, and the expected effects on inflation, fuel prices and economic activity.

Why a bill, not a resolution

Before the committee approved the proposal, Quimbo explained why lawmakers chose to craft the measure as an amendatory bill rather than a House resolution.

“For the record, right now, the way things are moving, there has been a presidential certification of urgency, so there is no difference whether it’s a House resolution or a bill,” Quimbo said.