MANILA, Dec 13: Philippines President Gloria Arroyo on Thursday rejected International Monetary Fund (IMF) advice to raise oil taxes, saying petroleum was already heavily taxed.

“A big chunk of the pump price of gasoline constitutes taxes, actually more than a third,” her spokesman Rigoberto Tiglao told reporters.

“If this tax burden will increase, the price of gasoline also increases. And the price of gasoline products is a major cost to consumers.”

He added: “We don’t believe that an increase in taxes in gasoline and other products is feasible or rational at this time.”

An IMF review mission this week urged Manila to work on “rebuilding” government revenues, which it said have declined markedly relative to economic growth.

The government “needs to look to selective tax increases”, including petroleum taxes, and to increase the value-added tax rate over the medium term, the IMF said at the end of a two-week review of the country’s economic performance.

But Tiglao said that since Manila is not seeking an IMF loan, “we are not bound by it.”

“Unlike the past IMF recommendations in the 1980s when we were practically pressured because we were seeking an IMF programme, which means seeking a loan, this time it’s purely advice.”

Manila completed drawing from a 1.4 billion-dollar IMF facility last year. It has since voluntarily submitted to IMF surveillance to avoid a repeat of the mid-1997 Asian crisis, when it was one of five countries most heavily affected.—AFP