MANILA, Philippines — With the cost of fuel reaching record highs, President Ferdinand Marcos Jr. is set to make a critical call today that could determine how much relief—or revenue loss—the country faces in the coming months.
Following a series of punishing price hikes triggered by the Middle East crisis, the President is scheduled to meet with the Development Budget Coordination Committee (DBCC) this Tuesday, April 7. The meeting’s sole agenda: a formal recommendation on whether to suspend or reduce excise taxes on petroleum products.
The decision is a delicate one. While motorists and transport groups are desperate for lower prices at the pump, the government is wary of the “fiscal shock” that comes with cutting taxes.
According to Palace press officer Claire Castro, the President is prepared to move quickly if the proposal makes sense for both the public and the national treasury. “Let us remember that taxes are the lifeblood of the government, so we need to balance everything,” Castro told reporters on Monday. “If the recommendation is appropriate and beneficial, the President will approve it promptly.”
The Department of Finance (DOF) has already sounded the alarm, warning that a total suspension of excise taxes from May until the end of the year could drain the government of at least P136 billion in revenue. If the 12-percent Value-Added Tax (VAT) is also removed—as many transport groups are demanding—that loss could balloon to a staggering P360 billion.
However, the potential relief for consumers is significant. Under the recently enacted Republic Act No. 12316, a full excise tax suspension could:
- Drop diesel prices by roughly P6.00 per liter.
- Reduce gasoline and LPG prices by as much as P10.00 per liter.
Even if the President signs off on the tax cut today, motorists won’t see an immediate change at the gas station. By law, the President can only invoke these emergency powers starting April 12, following the mandatory publication period of the new law.
Furthermore, any tax reduction would only apply to incoming fuel shipments, meaning it could take several days or even weeks for the “cheaper” fuel to work its way through the supply chain to the local pump.
The move comes as part of a broader “National Energy Emergency” declared by the President last month. Beyond tax cuts, the government has already released P20 billion to secure a 51-day national fuel stockpile and is exploring mandatory fuel subsidies for the agriculture and transport sectors.
As the DBCC presents its findings today, the nation waits to see if the government will prioritize immediate relief for struggling families or protect the long-term stability of the national budget.