Dominguez to Bongbong Marcos: Continue fuel marking

MANILA, Philippines—President Rodrigo Duterte’s chief economic manager has urged presidential race winner Ferdinand “Bongbong” Marcos Jr. to continue implementing fuel marking to sustain inroads against oil smuggling.

Finance Secretary Carlos Dominguez III said he believed that the next administration must and will continue the fuel marking program.

Asked if fuel marking will form part of the fiscal consolidation and resource mobilization plan to be turned over by the outgoing Duterte administration to presumptive president Marcos Jr.’s economic team, Dominguez replied: “Absolutely.”

To recall, before the Benigno Aquino III administration ended, former customs chief Alberto Lina proposed to expand fuel marking nationwide, following a pilot run at the Subic Bay Freeport Zone in 2008 to 2010. This proposal was adopted by the Duterte administration, and included in its comprehensive tax reform program.

Fuel marking was among the revenue-generating measures in the Tax Reform for Acceleration and Inclusion (TRAIN) Act signed by Duterte in 2018.

Following over a year of delay in implementation, tax-paid oil products were injected with a chemical marker signifying correct payments since September 2019 until now.

Data provided by Dominguez on Monday (May 16) night showed that tax collections from a total of 41.3 billion liters of marked oil from September 2019 to mid-May this year amounted to P429.8 billion. Dominguez had said that the increasing revenues from oil—with the implementation of the fuel marking program in full swing—meant that smuggling was on the decline.

Before fuel marking was implemented, government estimates had shown that oil smuggling flourished in the past and resulted in foregone tax revenues estimated to be equivalent to over half of the annual duties and taxes being collected by the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR), or about P27-44 billion per year.

The BOC so far collected P399.9 billion in import duties and other taxes thanks to the fuel marking program while the BIR contributed P29.8 billion in excise revenue from locally refined oil.

To date, 25.1 billion liters of diesel, over 16 billion liters of gasoline, as well as 212.2 million liters of kerosene have been fuel marked.

Of the 28 oil firms currently participating in fuel marking, Petron Corp. had the biggest volume of tax-paid oil so far, reaching 10.1 billion liters.

TSB