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Jakarta Post

'No immediate impact' from Philippines’ new coal tax

Viriya P. Singgih (The Jakarta Post)
Jakarta
Thu, December 14, 2017

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'No immediate impact' from Philippines’ new coal tax Coal is prepared for shipping at a port in this undated file photograph. (Courtesy of/mbss.co.id)

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he Energy and Mineral Resources Ministry has said that the Philippines’ plan to significantly increase its coal import tax in 2018 will not hamper coal trade between the two Southeast Asian countries in the immediate future.

“At present, the Philippines still needs a huge amount of coal for its power plants. So we believe this new policy will not affect Indonesia’s coal exports in the short run,” Energy and Mineral Resources Ministry spokesperson Agung Pribadi told The Jakarta Post on Wednesday evening.

The Congress of the Philippines ratified on Tuesday the Tax Reform for Acceleration and Inclusion (TRAIN) bill, which was proposed by President Rodrigo Duterte’s administration in order to generate more revenues to support its massive infrastructure development program.

The bill, which Duterte is expected to sign within the next few days, stipulates a significant hike in the import tax for coal from the current 10 Philippine pesos (20 US cents) per metric ton to 50 pesos in 2018, to 100 pesos in 2019 and to 150 pesos in 2020. The TRAIN bill also stipulates import tax hikes for other commodities.

Agung said many Indonesian exporters had signed long-term contracts with Philippine buyers, so the new policy would not make an immediate impact on the bilateral coal trade.

In 2016, the Philippines imported 18.48 million tons of coal, of which 88.3 percent came from Indonesia, according to the Geneva-based International Trade Center. (bbn)

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