By Ruth Abbey Gita-Carlos | Philippine News Agency
The government could incur up to P43.6 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 Usec. Karlo Adriano said the current approved measure—covering liquefied petroleum gas (LPG) and kerosene—would result in an estimated P4.1 billion in foregone revenues for three months.
“Now, if you decide to include a suspension of diesel and gasoline [on top of] LPG and kerosene, it will be around PHP43.6 billion losses in three months,” Adriano said.
The excise tax suspension on LPG and kerosene was approved by President Ferdinand R. Marcos Jr., following recommendations from the Development Budget Coordination Committee (DBCC), to balance fiscal responsibility with targeted relief measures.
Despite calls to expand the suspension to diesel and gasoline, Adriano said the DBCC is taking a cautious approach and continues to conduct monthly policy reviews.
Adriano clarified that while higher global oil prices may increase value-added tax (VAT) collections by P13 billion over three months, that would not be enough to offset the potential revenue losses from a full suspension.
“Again, if you consider full suspension of diesel and gasoline, if you include it, again, the total losses will be P43.6 billion. And your additional VAT collection will be around P13 to P14 billion. And then there’s a negative revenue loss of around P30 billion,” he said.
Adriano said the move is intended to directly benefit low-income households, since the majority of kerosene and LPG consumers come from the poor and marginalized sectors.
Citing data from the Philippine Statistics Authority’s 2023 Family Income and Expenditure Survey, Adriano noted that around 50% of kerosene consumption comes from the poorest 38 percent of the Filipino households, while 56% of LPG consumption is attributed to the bottom 70 percent.
Adriano said the suspension is expected to bring savings of around P36.95 per 11 kg. LPG cylinder and P5.60 per liter of kerosene.
Instead of a broader tax suspension, the government is implementing targeted subsidies, including a P10-per-liter fuel subsidy program.
