Lawmaker, consumer group oppose coal tax increase

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(File photo) Senator Win Gatchalian

Metro Manila (CNN Philippines, November 29) — Senate Energy Committee Chairman Win Gatchalian and consumer group Laban Consumer, Inc. are opposing the looming hike in coal tax.

The tax reform bill will impose the higher tax in three tranches – from the current ₱10 per metric ton to ₱100 in 2018, ₱200 in 2019, and ₱300 in 2020.

Gatchalian said coal supplies half of the country's power requirement, which means the tax hike will be directly passed on to consumers.

The senator said a ₱100 increase per metric ton in excise tax on coal will result in a ₱4.78 hike in the electric bill of an average consumer – those who use 200 kilowatt hours or less per month.

In 2019, an average consumer will pay ₱9.57 more; and by 2020, they will see their electricity bills rise by ₱14.35.

The total increase for the three tranches is ₱28.70.

Gatchalian said, "Sa computation namin, tataas ng ₱28 per kilowatt hour ang average consumer. Ang ₱28 per kilowatt hour isang kilong bigas na yan kung NFA rice yung bibilhin mo."

[Translation: In our computation, the average user will see an increase of ₱28 per kilowatt hour. Twenty-eight pesos per kilowatt hour is equivalent to one kilo of NFA rice.]

Vic DImagiba, president of Laban Consumer, said the increase in coal tax will also impact the price of cement by at least ₱9 per bag.  

Dimagiba, a former Trade and Industry undersecretary, said, "Semento uses coal to burn yung kiln nila, and also as the share of their power kasi ang coal yata ang base load ng generating plants."

He added, "Estimate namin kung 60 percent ang gamit ng coal ng cement companies at this proposed excise taxes ang bag ng cement tataas yung benchmark ng three, six, nine pesos per bag over the next three years."

[Translation: We estimate at that if cement companies use 60 percent coal, at this proposed excise taxes one bag of cement will see an increase of three, six, nine pesos per bag over the next three years.]

Retail competition will cause the price to go up even further. 

The group plans to raise their objections and concerns at the conference committee meetings next week.

If their proposal is not approved, they are considering going to either the Court of Appeals or the Supreme Court to question the specific provision.

During an interview, Dmagiba said, "Kung lumusot yan at naging part ng TRAIN law, possible we will question on that basis, and yung percentage increase masyadong mataas kasi meron pa ring requirement – dapat equitable and makatuwiran."

Gatchalian said the Energy Department should come up with mitigating measures to cushion the impact of the tax hike.

He said a possible measure is a subsidy of ₱300 per identified poor household or family.