Metro Manila (CNN Philippines, March 9) — The Department of Finance (DOF) is still not heeding the urgent call to suspend fuel excise taxes despite the soaring oil prices caused by the Russia-Ukraine war.
Speaking to CNN Philippines’ The Final Word, Finance Assistant Secretary Paola Alvarez reiterated the department opposes the suspension, which she said could lead to revenue loss of up to ₱117.4 billion – or 0.5% of the country’s gross domestic product (GDP).
It will also only slow down economic recovery because it will only temporarily lower the prices of goods by 0.03 percentage points this year, “but the idealized government spending from the foregone revenues will hamper our economic growth,” Alvarez explained.
She added that suspending fuel excise taxes is also not really advantageous for the bottom 50% of Filipino households – or those heavily affected by rising prices – since they only consume 13.9% of the fuel supply compared to the top 10% of households that consume around half.
What the DOF wants to do is to subsidize them through the Transportation department’s fuel voucher program, she said. An additional ₱2.5 billion will be released to provide the assistance to 377,000 qualified public utility vehicle drivers, Alvarez added.
