February 25, 2018, 7:31 am
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Coal tax hike to hurt industry, DTI says

The growth of the manufacturing sector in the Philippines will be challenged by the increase in power cost that could arise from higher excise taxes on coal.

Ramon Lopez, secretary of the Department of Trade and Industry (DTI), told reporters the planned increase in tax rates – from P10 to P100, P200 then P300 per metric ton – is  too big which could impact on the government’s goal of a 10 to 11 percent growth in manufacturing for the rest of the Duterte administration.

Lopez noted the need to study further the proposal due to the “challenging cost implication” on power rates.

Lopez said tax measures should be aligned to the country’s other objectives, such as the growth in manufacturing, so as not to lose the momentum the country has been enjoying.

“The infrastructure is here, the demographics, the demand and even the global economy (is recovering). It all depends on the demand. (Manufacturing) slowed down last year, but now the growth is double digit… hopefully we could sustain that… as long as we remain competitive,” he said.

At the National Export Congress Tuesday, Sen.. Sherwin Gatchalian said the P300 tax on coal would translate to P15 per kilowatt hour (kwh) increase in the monthly electricity bill of a household using 200 kwh.

Gatchalian said that is because half of the power generated by the country in some areas is from coal.

Households in areas where the source of power is 100 percent coal will see a P31 increase in electric bill per month.

“If we quantify this,  P31 can buy one kilo of rice for an average Filipino family,” Gatchalian said. 

He said small businesses in Metro Manila would see their bills increasing  as well.

Gatchalian based on estimates, an eatery would shoulder P74 additional cost, a computer shop which consumes a lot of energy about P190 and a laundry shop which depends a lot on electricity, P500 per month.
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