The steps taken thus far to address the ballooning crisis stemming from the war in the Middle East — that is threatening the global oil supply — have been described as reactive and unlikely to significantly improve the lives of the majority of Filipinos.

For instance, the proposed four-day workweek may offer good optics, but it would have little effect on reducing oil consumption.

Jose Enriquez Africa, executive director of the think-tank Ibon Foundation, said the institute’s calculations indicated savings of three to five percent in oil consumption through reduced travel and office use in the government and private sectors.

He said this would be a minuscule reduction in oil use and savings. While the immediate response is a show of “performative action,” the gains are very small.

It would have benefited policymakers if they had reviewed the Covid-19 responses where businesses realized that working from home doesn’t work.

In the end, most enterprises went back to the regular office setup of face-to-face work because, according to Africa, “that is how our economy is organized.”

Today, a substantial response would be the suspension of the excise tax on fuel, which would immediately reduce fuel prices by P10 per liter and the implementation of targeted subsidies.

Both measures are part of the proposed emergency powers the Palace is pursuing, but they would have to undergo a process expected to be contentious, as is the case whenever extra authority for the President is sought.

Africa said Ibon simulations suggest that the shortened office days won’t save much on fuel because many workers use public transport.

Private cars will remain on the road even with a four-day workweek, so the gains will be limited.

Thus, the scheme will ultimately hurt transport workers, as there will be less travel on buses, tricycles and jeepneys.

Instead of being productive, workers will use the extra day off to go to the malls since it’s cheaper for them to escape the summer heat there.

“I think it’s a performative act distracting from what really should be done. Productivity depends on the kinds of economic activity you have,” Africa said.

He explained that the service sector would benefit from the government’s move, but the “bottom line is that services are very low in productivity. Manufacturing, agriculture, if they’re modernized, that is potentially high productivity.”

Removing the excise tax would create a revenue vacuum of about P180 billion to P190 billion a year, which, with the prolonged effects of the conflict, the government must consider progressive taxation to recover.

Africa said the shift should be from a very regressive consumption tax-oriented system, which is a burden on the poor and vulnerable, towards more direct income and wealth taxation.

The last two administrations had been moving away from such a fiscal reform.

The economy is 73-percent consumption-driven, and with the current inflation burden, the tendency is for the economy to slow as purchasing power is pinched.

“Even from a very narrow growth perspective, actually cutting the excise tax and even the value-added tax, not just on oil but on other commodities, will boost the purchasing power that pumps up growth.”

A progressive tax system will benefit the economy by taxing the rich and freeing up money for the poor, according to Africa.

Such a change, however, would require immense political will, something that may be difficult to muster for an administration facing rapidly declining public support.