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TARIFF HIKE ON OIL A WRONG MOVE -IBON
by IBON Foundation
Tuesday, Jul. 27, 2004 at 5:29 PM
editors@ibon.org (632)7132729, (632)7132737 3/F SCC Bldg., 4427 Int. Old Sta. Mesa, Manila
“We are surprised that the TRM would even make such a proposal at a time when oil prices have been on an uptrend resulting in a fare hike and surge in inflation,” says IBON executive director Rosario Bella Guzman. “It is not consistent with government’s promise in its 10-point agenda of balancing the budget by collecting the ‘right revenues,’” Guzman adds.
The decision of the Cabinet-level Tariff and Related Matters (TRM) to hike the tariff on imported crude and refined petroleum from 3% to 5% is an ill-advised move, according to independent think tank IBON Foundation.
“We are surprised that the TRM would even make such a proposal at a time when oil prices have been on an uptrend resulting in a fare hike and surge in inflation,” says IBON executive director Rosario Bella Guzman. “It is not consistent with government’s promise in its 10-point agenda of balancing the budget by collecting the ‘right revenues,’” Guzman adds.
The planned tariff adjustment would raise diesel and gasoline pump prices by 19 to 36 centavos per liter. Government, meanwhile, projects to generate from the tariff hike more than P6 billion in additional revenues yearly as part of its campaign to tame the national budget deficit. As of May, the budget deficit is pegged at more than P77 billion.
“Raising the tariff levels of some imported commodities is welcome, but not on oil. We are too import-dependent on oil. And without a national program to develop our own oil resources as well as alternative sources, we can’t afford to raise tariffs. It would only further burden the people,” Guzman argues.
To widen the revenue base, IBON proposes that the TRM instead review current tariff levels on agricultural products which have been liberalized under the Agreement on Agriculture (AoA) of the World Trade Organization (WTO).
“The Philippines has reduced the tariffs of many imported agricultural products to levels that are even beyond what the WTO sanctions. We urge the TRM to seriously consider the option of restoring the tariffs of these imports to their pre-WTO levels to raise much needed revenues and at the same time protect local agriculture,” says Guzman.
IBON adds that government’s tax program should consider the people’s interest, and not blindly follow the policy prescriptions of the International Monetary Fund (IMF) and World Bank. Since last year, there has been constant pressure from the IMF-World Bank to increase petroleum taxes as a measure to bring down the budget deficit.
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