Sen. Sherwin Gatchalian said the government is considering tax adjustments, subsidies, and even fuel rationing as it responds to rising global oil prices and potential supply disruptions.

During a Senate hearing, Gatchalian addressed concerns that most interventions focus on the poorest sectors, saying broader measures like excise tax adjustments and possible value-added tax (VAT) changes would affect all income groups.

“If we're spending the excise tax, as well as the possibility of spending VAT, that will hit everyone, the middle class, even the rich segment,” he said, noting excise tax is the “most straightforward” option.

Still, support for the middle class remains under study. Gatchalian noted the sector is difficult to define, ranging from “middle-low” to “middle-high,” and emphasized targeting those “susceptible to inflation shock,” warning families could quickly fall into poverty as prices rise.

The senator also highlighted the complexity of removing VAT on oil, particularly proposals to exempt it at the point of importation. While possible in theory, he said implementation is challenging due to how taxes are embedded across the supply chain.

“In concept, it can be removed. But administratively, it's very difficult,” he explained, citing past VAT exemptions on medicines where savings were not fully passed on to consumers.

Beyond tax measures, the Senate is studying large-scale subsidies. Estimates for programs like Pantawid-Pasada range from P7.6 billion to P61 billion.

In a worst-case scenario, government spending could reach P400 billion—potentially requiring a supplemental budget or a Bayanihan-style emergency measure.

Supply concerns are also mounting. With the country’s oil inventory estimated at around 51 days—and LPG at just 34 days—Gatchalian urged early preparation for fuel rationing.

“I know it's unpopular… but this is reality,” he said, suggesting limits on non-essential fuel use to extend supply, while prioritizing essential services such as emergency response and national defense.

He added that a price cap on fuel may be considered as a last resort, particularly to curb hoarding and profiteering, pointing to sharp increases in LPG prices in recent weeks.