Philippines Macroeconomist/Strategist

Jun Trinidad

Macroeconomics

<p><strong>No doubt most will feel the pinch from the fuel excise hike under the recently approved TRAIN (Tax Reform for Acceleration and Inclusion) law but in my view, it’s not a key macro risk.</strong> My spreadsheet calculations failed to show a large potential decline in household (HH) consumption assuming an average excise hike of 60%-70% in petroleum products based on TRAIN. Moreover, any downside consumption risk will be offset by potential windfall income of &gt;Php100bn (~1.7% of real HH consumption in…</p>

No doubt most will feel the pinch from the fuel excise hike under the recently approved TRAIN (Tax Reform for Acceleration and Inclusion) law but in my view, it’s not a key macro risk. My spreadsheet calculations failed to show a large potential decline in household (HH) consumption assuming an average excise hike of 60%-70% in petroleum products based on TRAIN. Moreover, any downside consumption risk will be offset by potential windfall income of &gt;Php100bn (~1.7% of real HH consumption in…

Could Fuel Excise Hikes in 2018 Spoil Upbeat Consumption Prospects?