Government releases P7.331B from VAT on oil in 11 mos

The government has released a P7.331-billion windfall from the value-added tax (VAT) on oil as of end-November, latest data from the Department of Finance (DOF) showed.

The funds have been released to various agencies for the different social services and microfinance initiatives of the government.

The windfall amount comprises actual releases that have been made from January to November.

Data on total collections is not yet available but the government earlier projected a total windfall of P18.6 billion from VAT for 2008.

Of the total, the government has released P4 billion to the Department of Social Welfare and Development (DSWD) for the Pantawid Kuryente program.

The program provided a P500 subsidy to each of the estimated four million small electricity users or those consuming below 100 kilowatt-hours of electricity per month.

The government also released P1 billion to the Commission on Higher Education for student assistance and P500 million to the Department of Energy for the Philippine Energy Efficiency Program.

Another P500 million went to the DSWD to enable the agency to subsidize the elderly and another P500 million went to the Philippine Postal Savings Bank for its microfinance program.

The Department of Education also received P500 million for its school feeding programs.

The Presidential Commission for the Urban Poor received a measly P100 million, intended for emergency land acquisition for victims of eviction and demolition.

The DOF estimates total revenues from VAT on oil and power to reach P119.6 billion for 2008.

The estimated windfall of P18.6 billion took into account an average Dubai oil price assumption of $115 per barrel.

However, oil prices have been easing since July.

Latest data from the Finance department showed that the average price of Dubai oil stood at $131 per barrel in July. This dropped to $112.86 in August, $95 per barrel in September and $80 per barrel in October.

In July, the price of oil in the world market reached a record high of $147.27 per barrel.

However, as of November, the average Dubai crude is already at $42 per barrel, its lowest since March 2005, latest data from the Department of Energy showed.

According to the DOE’s oil price monitoring report as of Nov. 30, the average price of unleaded gasoline is already at P35.96 per liter while that of diesel is at P35.94 per liter.