Palace must study impact of fuel tax on price of rice, fish

In selling its tax proposals, the Duterte administration should attach exemptions and safety nets on each, so that a skeptical public would at least give it a fair hearing of its explanations.

One of these, Senate Minority Leader Ralph Recto pointed out, are the farming and fishing sectors who "must be spared the full brunt" of the proposed P10 tax per liter of gasoline "as such increase would impact on the price of food on the table."

Recto said the administration must "temper, trim its tax proposals and, in fact, throw away a few."

A higher tax on fuel, Recto said, "if not handled well, would have the effect of pouring gas into fire."

Recto reminded the Palace "to not slip all proposals into one straitjacket" that does not give room for exemptions.

He said Malacañang should be aware of how fuel costs affect prices of fish and other marine products, "with gasoline accounting for up to 80 percent of the landed cost of some fish species."

Recto cited a Bureau of Fisheries and Aquatic Resources study that the share of gas and oil in the total fishing expense of a coastal or municipal fisherman ranges "from 31 percent for those who use shrimp gillnets, to a high 80 percent of a 'drift hook and line' fisherman."

Fishermen who use the traditional beach seine, in which a net is pulled to the shore, spend 40 percent of their income to buy gas, Recto added.

Fuel accounts for half of the price of tulingan (frigate tuna), galunggong (round scad), matangbaka, dilis (anchovies), alumahan, tambakol, bisugo (sea bream), lapu-lapu (grouper) and talakitok (snapper), Recto said.

As fishing grounds get depleted, fishermen now use more fuel to venture out further for longer periods but for less catch, Recto explained.

With the spread of mechanized farming, fuel has also become a major farm input, as, in the case of rice, machines now perform all phases of growing, from plowing by tractors to harvesting by modern combines, Recto said, citing the government's 3 horsepower per hectare mechanization target by the end of the year.

"In the case of palay, for every P1 gross, about 64 centavos is spent for production," he said.

"Yung average P80,000 gross per hectare, about P49,000 is the cost of production. Kung tataasan mo pa ang presyo ng gasolina ng traktora at thresher at water pump, ninipis ang kita ng magsasaka," Recto said.

"That's just for production," Recto stressed, "Hindi pa kasama ang transportation, which is made costlier by the heavy traffic on our roads."

Recto said any plan to raise the tax on fuel should be studied for "its impact on the food-producing poor and the food-consuming poor."

For those who produce, poverty incidence is highest among fishermen at 39.2% and farmers at 38.3% in 2012, above the nationwide incidence of 25.2% recorded that year, Recto said.

For those who consume, the bottom 30 percent of society spend 60 percent of income on food, above the national average of 42 percent in 2012.

"The tax on fuel will also affect bancas. So proponents should not imagine that it is the BMWs only that would be affected," Recto said.

The administration plans to hike the excise tax on gasoline from P4.35 to P10 per liter, which Finance officials justify as the mere indexing to inflation of the rate set almost 20 years ago.

Recto said government should ready its plan to grant fuel subsidy "or fuel tax discounts" to the fishing sector.

"Kahit wala yang plano na dagdag buwis, matagal ng nahihirapan ang mga mangingisda sa kaunting huli na dinagdagan pa ng pagbarikada ng China sa West Philippine Sea," Recto said.