Economic managers defend non-suspension of fuel tax

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April 15, 2026 | 12:00am

MANILA, Philippines — Suspending the excise tax on diesel and gasoline is unlikely to provide meaningful respite as it would mostly benefit the rich, economic managers said, as they vowed to continue providing targeted relief to sectors reeling from the impact of the Middle East conflict.

Finance Undersecretary Karlo Adriano said the excise tax on diesel only accounts for P6 per liter, a “relatively small” amount, given that its price has reached P100 per liter.

“That’s why the DBCC (Development Budget Coordination Committee), in coordination with the other agencies, particularly DOE (Department of Energy) and DOTr (Department of Transportation), decided to provide a P10 discount instead of P6. And this P10 discount will be targeted particularly for the most affected sectors,” Adriano said.

He was referring to the P10-per-liter subsidy to be given to public utility vehicle (PUV) drivers in the next three months.

Adriano also pointed out that the top three deciles or income classes constitute 85 percent of diesel consumption.

“So if we remove the (excise tax on) diesel, it would mostly benefit those who consume the highest quantities, the richest. So the recommendation of the DBCC is the P10 (per liter) targeted (subsidy) for those who are most affected by our situation,” the finance official added.

In a statement, Finance Secretary Frederick Go defended the administration’s move to avoid a blanket suspension of fuel excise taxes, calling it balanced and fiscally responsible.

Go said the DBCC’s recommendation to suspend excise taxes on kerosene and liquefied petroleum gas (LPG) is aimed at easing the burden on the “most vulnerable” while also considering middle-income families.

President Marcos has finally exercised his special powers granted by Congress by ordering a reduction in excise taxes on select fuel products, nearly three weeks after signing the measure into law on March 25.

Marcos’ move, however, drew flak because it did not cover diesel, which represents the highest fuel import and is the most widely used by the public transport sector.

With the excise tax suspension, the Bureau of Customs (BOC) is bracing for up to P500 million in monthly foregone revenues from LPG and P20 million from kerosene, according to Customs Commissioner Ariel Nepomuceno.

He said the figure could go higher if diesel and gasoline would be covered by the suspension.

“We understand that while this will hurt our collections, there are bigger interests at stake. When the President wants to cushion the impact, we just have to support. But on our part, we’re hoping our surplus reserves, almost P3 billion, won’t be depleted,” Nepomuceno said.

The estimate is based on the BOC’s full-year 2025 collections, which generated P4.75 billion for LPG and P182.3 million for kerosene.

For Sen. Erwin Tulfo, the excise tax suspension should cover diesel and gasoline. He said he has information the President is considering including the two fuel products.

Meanwhile, the country’s liquefied petroleum gas (LPG) supply has been extended to 50 days, driven by lower demand as more households shift to traditional heating fuels amid record-high prices.

LPG Marketers Association Inc. founder Arnel Ty said nationwide demand has dropped by 30 percent, as high LPG prices have pushed consumers, particularly in rural areas, to use charcoal and firewood instead. — Brix Lelis, Aubrey Rose Inosante, Jose Rodel Clapano, Marc Jayson Cayabyab