EO 113 (s. 2020) — Temporary 10% Additional Import Duty on Crude Oil and Petroleum Products (COVID-19)

Full title: Temporarily Modifying the Rates of Import Duty on Crude Petroleum Oil and Refined Petroleum Products Under Section 1611 of Republic Act No. 10863, Otherwise Known as the “Customs Modernization and Tariff Act”

Signed: May 2, 2020 | President: Rodrigo Roa Duterte

Status note: This EO was expressly tied to the Bayanihan to Heal as One Act (RA 11469) emergency powers, which lapsed upon RA 11469’s expiry (approximately June 24, 2020), and also auto-reverted upon the DOE trigger-price certification under §3.

Context

Issued during the COVID-19 national emergency (Proclamation 929/2020; RA 11469). The government needed additional revenue to fund COVID-19 social amelioration programs and economic recovery [EO 113, s. 2020, WHEREAS ¶3–4, 2020-05-02].

Context of low oil prices: May 2020 saw historically low global oil prices (WTI even went negative briefly in April 2020), making this a politically opportune moment to impose an oil import tax with minimal consumer impact.

The NEDA Board approved the temporary 10% additional duty on April 8, 2020 [EO 113, s. 2020, WHEREAS ¶6, 2020-05-02].

Key Provisions

§1 — Modified rate: All crude petroleum oils, refined petroleum products, and related products (per Annex A, Tariff and Customs Code §1611 headings) subject to a temporary additional import duty of 10% on top of existing MFN and preferential rates [EO 113, s. 2020, §1, 2020-05-02].

§3 — Reversion trigger: Modified rates revert to 0% when international oil prices increase to the trigger price, upon DOE certification confirmed to DOF. BOC issues corresponding Customs Memorandum Order [EO 113, s. 2020, §3, 2020-05-02].

§4 — Use of proceeds: DBM directed to study measures ensuring proceeds fund COVID-19 response [EO 113, s. 2020, §4, 2020-05-02].

§7 — Effectivity: In force until RA 11469 ceases to take effect, or upon trigger-price reversion, whichever is earlier [EO 113, s. 2020, §7, 2020-05-02].

Policy Notes

• Contrast with EO 890 (s. 2010, GMA), which set petroleum import duty to zero for competitiveness reasons — EO 113 is the inverse, using petroleum tariffs as a fiscal instrument during a crisis
• The Annex A tariff list covers crude petroleum, motor spirits (RON 97 and below), condensates, lubricating oils and greases, diesel fuel, fuel oils, jet fuel, LPG, and natural gas (liquefied and gaseous)
• See Digest: EO 890 (s. 2010) — Zero MFN Tariff on Crude Oil, Petroleum Products, and Asphalt for the base zero-tariff context that EO 113 temporarily modified

Full text: Cleaned copy