Suspension of VAT, excise taxes on petrol products remains uncertain

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June 24, 2025 | 7:07pm

MANILA, Philippines — Amid rising tensions in the Middle East that threaten to push global fuel prices higher, calls have grown for the Philippine government to suspend the value-added tax (VAT) and excise taxes on oil products to ease costs. However, this move appears unlikely in the near future.

In a Palace briefing, Department of Energy (DOE) officer-in-charge Sharon Garin responded to calls for tax suspensions on fuel. While Garin admitted that removing these taxes would significantly lower fuel prices, it was the law that mandated these levies. 

“Legislation iyan eh, so hindi pwede na iyong DOE can go against what is mandated by law, nor DoF (Department of Finance), nor even the president. So, kailangan talagang sundin kung ano iyong nasa batas,” Garin said. 

(It is legislation, so the DOE cannot go against what is mandated by the law, not the DoF, nor even the president. So the law needs to be followed.) 

Garin said that it was up to Congress to decide whether to amend the current law.

However, the government is still researching whether a suspension is still possible. The law does not have a specific provision for a complete suspension: only a suspension on a possible increase. 

The acting DOE chief is also hesitant to support any measures to suspend fuel taxes, estimating that the government could lose around P300 billion in revenue. 

“If we do away with the P300 billion, that’s also how many kilometers of roads, how many school buildings, our health services, it might take away from that since the government would have less budget. So, it’s a balance,” Garin said in a mix of English and Filipino. 

The government has recently asked fuel firms to stagger their fuel increases in light of the conflict in the Middle East. 

While the price of crude oil fell after US President Donald Trump announced a ceasefire between Israel and Iran, Garin said that it has yet to be seen if this will completely cancel out possible increases in the following weeks. 

Oil in the Philippines is not regulated by the government, she clarified. Should oil firms choose to raise their prices to reflect the world market, the government could not punish them for this.