Manila: The government could incur up to PHP43.6 billion in revenue losses over three months if it expands the suspension of excise taxes by including diesel and gasoline, the Department of Finance (DOF) warned on Tuesday. Speaking to Palace reporters, DOF Undersecretary Karlo Adriano stated that the current approved measure, covering liquefied petroleum gas (LPG) and kerosene, would result in an estimated PHP4.1 billion in foregone revenues for three months.
According to Philippines News Agency, Adriano explained that if the suspension of excise taxes were extended to diesel and gasoline, the losses would significantly increase. The excise tax suspension on LPG and kerosene was approved by President Ferdinand R. Marcos Jr., based on recommendations from the Development Budget Coordination Committee (DBCC), aiming to strike a balance between fiscal responsibility and providing targeted relief measures.
Despite appeals to extend the suspension to diesel and gasoline, Adriano mentioned that the DBCC is adopting a cautious strategy, conducting monthly policy reviews. He clarified that although higher global oil prices might boost value-added tax (VAT) collections by PHP13 billion over three months, this would not suffice to counterbalance the potential revenue losses from a full suspension.
Adriano emphasized that the initiative is designed to benefit low-income households directly, as the majority of kerosene and LPG consumers belong to the poor and marginalized sectors. Citing data from the Philippine Statistics Authority's 2023 Family Income and Expenditure Survey, he pointed out that around 50 percent of kerosene consumption is attributed to the poorest 38 percent of Filipino households, while 56 percent of LPG consumption is linked to the bottom 70 percent.
The suspension is expected to offer savings of approximately PHP36.95 per 11 kg LPG cylinder and PHP5.60 per liter of kerosene. Instead of a broader tax suspension, the government is rolling out targeted subsidies, including a PHP10-per-liter fuel subsidy program.
