Senate President Pro Tempore Panfilo Lacson on Sunday called for decisive, even “extreme” government intervention to protect Filipinos from surging fuel prices, while cautioning that proposals to suspend the value-added tax (VAT) could cost the government more than P320 billion in lost revenues.

Lacson said the government must act swiftly under existing laws to address the ongoing energy crisis, including possible temporary takeovers or tighter regulation of energy-related industries if abuses are detected. 

He emphasized that such measures, though drastic, may be necessary to ensure fair pricing and protect consumers.

“These are extreme measures, but the government needs to stay on its toes to monitor,” Lacson said in a radio interview. “If there is abuse in the sector, the government must be ready to step in as a warning.”

He cited provisions under Republic Act 8479, which allow the Department of Energy (DOE) to temporarily direct operations of oil industry players during a national emergency. 

Similar powers are granted under Republic Act 12120 for the natural gas sector, and Republic Act 9511, which allows the President to take over power transmission operations in the interest of public welfare.

At the same time, Lacson stressed the importance of transparency. 

He noted the government has yet to provide updates on sanctions against fuel retailers accused of prematurely raising prices without authorization.

“The public deserves feedback on what happened to the offenders that were caught in plain sight raising fuel prices without authorization from the DOE or Energy Regulatory Commission,” he said.

Lacson also flagged delays in delivering relief measures, particularly the possible suspension of excise taxes on fuel under Republic Act 12316. 

The law requires a one-month monitoring period before such suspension can be recommended.

With the measure taking effect on 12 April, Lacson said the earliest recommendation could come by 12 May, with actual relief potentially felt only by June due to bureaucratic processes.

“With the slow bureaucracy, it may take until June for us to feel the relief from the suspension of the excise tax, if at all)," he lamented.

The senator also urged the government to maximize around P230 billion in available funds from the 2025 and 2026 national budgets to assist sectors hardest hit by rising fuel costs, particularly transport workers and commuters.

He stressed that any financial aid must be distributed through a data-driven system to ensure it reaches those most in need, rather than being influenced by politics.

“The government must plan well, and have a clear direction on where to use the funds - as well as properly use the powers due to the state of energy emergency,” Lacson said.

Economic concerns

While some sectors have proposed suspending VAT on petroleum products to ease the burden on consumers, Lacson warned that such a move could significantly impact government revenues and the broader economy.

He explained that suspending excise taxes alone could result in around P200 billion in foregone revenues by 2027. 

Adding VAT suspension could push total losses beyond P320 billion.

“It is not that simple. Some calls for suspending the VAT may sound good to the people, but its impact on our economy is huge. We may suffer in the long- or medium-term,” he said.

He added that any decision to suspend VAT must undergo careful study, balancing immediate relief for consumers against long-term economic stability.

As fuel prices continue to rise, Lacson reiterated the need for both government vigilance and public awareness to ensure accountability and protect national interests.