SIXTEEr':TH CONG.'lESS (hI:; TPdE REPUBtK: t 
OfTHE~, 
J 
Fi.'"l.t P..egutlll'·~ 
) 
SEiifAli: 
s. No. 208 
'trtllh> 
{' 
,011.:. "f HI" ;£'m.t~tll\ 
'13 
JUl -1 P 4 :42 
When a higher tT'k Vafoo,..Added TaX:,me'oo~ ~ 
was allOWed to 
beilnpoSed begmningJuly 1, ,2005by~ 
Aet Ntt9331', ~ 
mtertmoooot prr..e of 
Crude Oil was, at $50 per tJane~U~~aat 
$58 perbatret;armt Diesef at $70 
per barrel. (Department of En. - Oft'Mbnitof 'as of Jul1Je 9, 2(05) Today, the price of 
petfOleOm is double its pnoo in 26iJ5. 
This surely is an added burden'to the greateSt fit!ffibef'of the Filipioo peup'.e, 
most especially the POOf and, even the middle, class,' It also shows tl1at temporary 
measures, by gOvernment to ease t'l'le ~"'}' of some ~s 
JOOSt affected ca, ... ,not 
cope with the running price inc:feases.J.l'Il$,~, is· a l'Ieedtoprovfdefora quick-
response soItJtioo ~ 
to oiJpiice ~lmy; 
It is the policy <If 1ire'stare, under .A11icl~ !1 section 9 of the 1987 Constitution, 
The Slate shall prow.ote a jtIst $d dynamic ~! 
order that, win l"lStlfe tr.e 
prosperity and' jndependence of ~, ua(ioo, and' free, th~ peQple frem poverty 
through policies t.llatprowre'~sOctai\ sernicesi ~:k'umotefuU employment;' 
a rising standard of living, andanimprO\&dquaiitJ of life for ail. 
To give thegovemmem a quick~respt3lWe and dynamic seltJiioo, this hili seeks to 
mitigate the impact of oil prwegcbyaufomaficaHyaeereasing the 1 
Value-Added 
Tax Rate on petroWl.im p~ 
depending on wc;td dude 011 p1"'~' 'ieSf 
the Department of Energv. 
In view of the foregoing:, the earlyenaum1el'lt pf~brn "eaqlesfly sought. 


SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHIl]IPPINES 
) 
First Regular Session 
) 
.i 
l'1'I <t h.> 
(~If,;. ~f t~?j,,,',eb'u 
SENATE 
'13 
JUL -1 
P 4 :42 
S.B. No. 2lllI 
...... VE" BY, r 
----------------In-tr-o-du-c-e-d-b-y-S-e-n-.-G-r-eg-O-r-io--B-.-H-o-na-s-a-n-I-I--------------H' 
AN ACT 
AUTOMATICALLY DECREASING THE VALUE-ADDED TAX RATE ON PETROLEUM 
PRODUCTS DEPENDING ON INCREASING WORLD CRUDE OIL PRICES 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
' . 1 
Section 1. Declaration of Policy. - In order to promote a just and dynamic social order 
that will free the people from poverty through policies that provide rising standard of 
living and an improved quality of life for all, the state hereby establishes a quick-
response mechanism to decrease the imposable value-added tax rate depending on the 
increasing world crude oil prices as determined by the Department of Energy. 
Sec. 2. Automatic Value-Added Tax (VAT) Adjustment Mechanism - A Value-Added 
Tax (VAT) of Ten Percent .(10%) shall be imposed on petroleum products whenever 
world crude oil prices exceed One Hundred US Dollars (USD 100) per barrel. Provided, 
that the imposable VAT rate on petroleum products shall be reduced by increments of 
One percent (1 %) every time the world crude oil price increases by increments of Ten 
US Dollars (USD 10) per barrel. Provided, Further, the Bureau of Internal Revenue shall 
adjust the imposable VAT rate at the beginning of each month depending on the world 
crude prices as determined by the Department of Energy. Provided, finally, that when 
world crude oil prices decrease, the VAT may be adjusted accordingly by increments of 
One percent (1%) but,in no case shall the final imposable VAT be above Ten Percent 
(10%). 
Sec. 3. Implementing Rules, and Regulations. - The Secretary of Finance shall, upon 
the recommendation of the" Commissioner of internal Revenue, promulgate not later 
than thirty (30) days upon the effectivity of this Act, the necessary rules and regulations 
for the effective implementation of said Act. 
Sec. 4. Separability Clause. - If, for any reason, any section or prOVision of this Act is 
held unconstitutional or invalid, the other provisions not otherwise affected shall remain 
in full force and effect. 
Sec.' 5. Repealing Clause. - All laws, executive orders, rules and regulations 
inconsistent with or co~trary to this Act, are hereby repealed or amended acc?rdingly, 
Sec. 5. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
Approved,