MANILA, PHILIPPINES – President Duterte’s economic managers, inter-agency Development Budget Coordination Committee (DBCC) said on Thursday, February 24, that the government will instead provide targeted relief assistance and support to sectors affected by the skyrocketing oil prices, despite calls to suspend petroleum taxes.
With oil prices skyrocketing as a result of Russia’s attack on Ukraine, the Philippine government is allocating P2.5 billion ($49 million) in fuel subsidies to public transportation drivers, reports Rappler.
According to the DBCC, the amount would be used for the Department of Transportation’s fuel subsidy program, where 377,000 drivers will be given vouchers. The fuel assistance wherein subsidies in the form of vouchers will be given to PUV drivers who are operating jeepneys, UV express, taxis, tricycles, and other full-time ride-hailing and delivery services nationwide.
It is on top of the Department of Agriculture’s P500-million budget for affected farmers and fisherfolk.
“Given recent developments, the government remains ready to provide targeted relief assistance and support to address the impact of the oil price hike for affected sectors, especially public utility vehicle drivers, farmers, and fisherfolk,” the DBCC said in a statement.
“This will help mitigate the impact of elevated fuel prices on production and transport costs of farm and fishery products.”
Furthermore, the DBCC stated that the government is pursuing a holistic value chain approach to ensure adequate and affordable food supply in the face of rising oil prices.
Per the DBCC, the DA specifically supports legislation such as Senate Bill No. 139, or the Philippine Livestock Development Industry Act, and Senate Bill No. 2176, or the Affordable Pork Act, to help alleviate potential domestic supply constraints and prevent second-round effects on prices.
According to the latest Banko Sentral ng Pilipinas (BSP) forecast as of Feb. 17, the Dubai crude oil price for this year is expected to average $83.3 per barrel. Nonetheless, based on the most recent oil futures, the DBCC expects it to fall to $79 by the end of the year.
The DBCC’s announcement comes in the wake of some congressional proposals to suspend oil taxes.
The reenactment of Section 43 of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which provided for the automatic suspension of excise taxes when the price of crude in the global market exceeded $80 per barrel, was particularly promoted by lawmakers.
Last October, the Department of Finance (DOF) warned Congress that suspending the excise tax on petroleum products would result in significant revenue losses for the government and could jeopardize the budget for coronavirus recovery measures.
According to Finance Undersecretary Antonette C. Tionko, the proposed suspension of fuel taxes would result in a monthly revenue loss of P10.95 billion.