FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
Second Regular Session 
) 
'12 
liAR 21 
. ,~': 36 
SENATE 
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S. No. 3HH 
Introduced by Senator GREGORIO B. HONASAN II 
EXPLANATORY NOTE 
When a higher 12% Value-Added Tax rate on petroleum products was allowed to 
be imposed beginning July 1, 2005 by Republic Act No. 9337, the international price of 
Crude Oil was at $50 per barrel, Unleaded Gasoline at $58 per barrel, and Diesel at $70 
per barrel. (Department of Energy - Oil Monitor as of June 9, 2005) 
Today, Crude Oil is priced at $122 per barrel, Gasoline at $136 per barrel and 
Diesel at $137 per barrel. (D.O.E. Oil Monitor as of March 6, 2012) In other words, 
the price of petroleum today is double its price in 2005. 
This surely is an added burden to the greatest number of the Filipino people, 
most especially the poor and even the middle class. It also shows that temporary 
measures by government to ease the burden of some sectors most affected cannot 
cope with the running price increases. It should likewise be stated that the government 
economic targets for this year can be achieved on its assumed oil price of only $100 per 
barrel. Thus, there is a need to provide for a quick-response solution adaptable to oil 
price instability. 
It is the policy of the state, under Article II Section 9 of the 1987 Constitution, 
that: 
"The State shall promote a just and dynamic social order that will ensure the 
prosperity and independence of the nation and free the people from poverty through 
policies that provide adequate social services, promote full employment, a rising 
standard of living, and an improved quality of life for all." 
To give the government a quick-response and dynamic solution, this bill seeks to 
mitigate the impact of oil prices by automatically decreasing the imposable Value-Added 
Tax Rate on petroleum products depending on world crude oil prices as monitored by 
the Department of Energy. 
In view of the foregOing, the early enactment of this bill' e nestly sought. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
Second Regular Session 
) 
SENATE 
S. No. 3161 
Introduced by Senator GREGORIO B. HONASAN II 
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: 
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. A Value-Added Tax (VAT) ofTen 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, A'nally, 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 contrary to this Act, are hereby repealed or 
amended accordingly. 
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,