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Gatchalian votes for TRAIN passage; vows to mitigate effects of coal tax

SURIGAO CITY, Philippines – As dinnertime approaches, the fish section of the public market in this city glows with brisk sales, Sept. 2015 file image. Struggling through the pain of paying the highest power rates in Southeast Asia, Filipino households are expected to bear the impact of a power rate hike following the ratification of the massive increase in the excise tax on coal, the country’s prime source of energy. PHOTO BY MARK CAYABYAB/OS WIN GATCHALIAN

Senator Win Gatchalian on Wednesday voted for the ratification of the Bicameral Conference Committee version of the Tax Reform for Acceleration and Inclusion (TRAIN) bill while reiterating his strong reservations against the coal tax provision of the measure. He cited that the excise tax would become a “pure pass on charge” resulting to an additional P13.2-billion in electricity costs that consumers inevitably would have to shoulder.

“Despite my affirmative vote, I would like to put on record that I still maintain my reservations regarding the massive increase in the excise tax on coal that has made it into the final version of the law for the President’s signature,” he explained.

The two chambers of Congress agreed on a compromise tax rate of P150 per metric ton on coal, divided into tranches over the next three years upon its enactment. This means the excise tax would be P50 per metric ton in 2018, P100 in 2019, and P150 in 2020. The original Senate version proposed a “100-200-300” hike scheme.

Gatchalian, who is the chairman of the Senate Energy Committee, explained the negative implications of the tax hike: “The tax hike up to P150 after three years will result in an average monthly rate increase of Php 14.348 for a 200 kWh household served by a 100% coal contracted distribution utility. This is equivalent to the price of half a kilogram of rice for 2.7 million households,”

While proponents of the coal tax increase may downplay it as negligible, Gatchalian pointed out that Filipinos are already struggling through the pain of paying the highest power rates in Southeast Asia. With this, Gatchalian stresses its supporters “miss the point entirely.”

The senator then posed a challenge to his colleagues who like him were likewise alarmed by the looming electricity rate hikes to support the passage of future legislation that would aim to cushion the impact of the electricity hike on consumers.