As tensions rise in the Middle East, labor calls on Palace to suspend taxes on fuel and OFW protection

Press Release

04 January 2020

As tensions rise in the Middle East, labor calls on Palace to suspend taxes on fuel and OFW protection

Barely four days upon taking effect, labor group Bukluran ng Manggagawang Pilipino (BMP) is already demanding from President Rodrigo Duterte the suspension of not only the third tranche of of excise taxes on petroleum and petroleum products the entire fuel tax package under the TRAIN Law and the value added tax on fuel to cushion the imminent impacts of a rise in inflation as the US-Iran conflict heats up.

The group in a statement said that Malacanang should protect the consumers and overseas workers “by acting quickly and decisively” to shield the them from inevitable price hikes on basic goods, a likely outcome triggered by a spike on the price of international oils from the Middle East.

The White House has announced recently that it deployed an additional 3,500 troops Marines in Iraq after Iranian officials vowed “harsh revenge” after a US drone strike killed Qasem Soleimani, a senior Iranian general.

“The president should quit dilly-dallying and immediately issue an executive order that will suspend the collection of excise and value added taxes on oil to avert inflationary impacts on commodities. He must have the foresight and diligence to act swiftly in behalf of our struggling countrymen”, said Leody de Guzman, chairperson of BMP.

Global crude oil prices have risen by over 4 percent—Brent rose to $69.16, while WTI increased 4.3 percent to $63.84 making investors increasingly anxious.

“Majority of Filipinos live in poverty. Any increase in prices would be harsh, if not fatal, not only to four-tenths of our labor force that belong to the informal economy but also to those in the formal sector who are already suffering from stagnated and starvation wages,” De Guzman reasoned.

“The Duterte regime is duty-bound to protect the welfare of the Filipino people, above all. It should sacrifice and share the burden for the sake of the people. But if apologists in the bureaucracy would argue against the suspension of oil taxes by pointing to losses in government revenue, then the BMP demands that it pursue other sources, particularly by increasing taxes on properties, luxuries, and corporate incomes,” he adds.

The labor leader argued that even if the Train Law indicated that tax increases may only be suspended once global crude oil prices reached or exceeded $80 per barrel, he says that the catastrophic outcomes of a full-blown US-Iran conflict will not limited to international oil prices.

De Guzman warned that a full blown US-Iran conflict may push global crude oil prices to $80 per barrel, which will have a compounded and multi-faceted effect on the local economy. Prices would shoot up, including the rates of the oil-dependent energy sector. OFW remittances would drop. Employers would cut losses by resorting to abusive practices. Hoarders and speculators would use the opportunity to rake in quick profits”.

OFW Dislocation

BMP also persuaded Malacanang to be ready in executing evacuation protocols once the US-Iran turns violent and to deploy emergency employment opportunities for workers to be displaced throughout the conflict-riddled region.

De Guzman said that as of 2016, the Philippine Overseas Employment Administration recorded that there are only 679 Filipinos working in both Iran and Iraq but fears that there are thousands more undocumented Filipinos in the two countries.

He further noted that neighboring Middle East nations, which also houses American military bases, and installations such as Saudi Arabia, Kuwait, Oman, Qatar, Jordan and United Arab Emirates are top destinations of overseas Filipino workers, who may fall victim to a “proxy war” in the region.###

Contact person: Ka Leody de Guzman 0920-5200672