Motorists have waited in vain for a reduction, or at least a suspension, of the excise tax on key fuel products — diesel and gasoline — as the Department of Finance (DoF) maintains that such tax cuts would have little meaningful impact on the broader economic situation of most Filipinos.

Despite being granted emergency powers through an executive order, President Ferdinand Marcos Jr. balked at a tax cut, citing the resulting revenue shortfall.

Finance Secretary Frederick Go said the Development Budget Coordination Committee (DBCC), which played a pivotal role in the President’s decision on Monday to suspend the excise tax on kerosene and liquefied petroleum gas (LPG), found that a price reduction from suspending the excise tax on gasoline and diesel would be minimal and largely influenced by market forces.

“Following a careful and thorough review of policy options by the DBCC, the government is taking a balanced and fiscally responsible approach to address both the immediate and long-term challenges arising from the ongoing conflict affecting the Middle East,” Go said.

The Department of Budget and Management (DBM), however, disputed the DoF’s assertion, insisting that funds were sufficient for subsidy programs even without the proceeds from the excise tax.

DBM Secretary Rolando Toledo said the fiscal space remains available even as expenditures rise. These are drawn from the 2025 and 2026 General Appropriations Act (GAA) and continuing appropriations.

“For 2026, under our current budget, we have identified a possible funding source of around P200 billion,” he said.

No long-term relief

Go, however, clarified that the DBCC has determined that suspending the excise tax on diesel and gasoline “likely would not provide meaningful relief, as any reduction in retail pump prices would be marginal and largely offset by prevailing market dynamics.”

President Ferdinand R. Marcos Jr. exercised his authority to suspend the taxes on kerosene and LPG imports, which caused public frustration.

Filipinos were anticipating the suspension or reduction of the excise tax on gasoline and diesel to preserve their purchasing power, even as pump prices remained in the triple-digit-per-liter range in Metro Manila.

However, some lawmakers have pushed back against the proposal, with the Department of Finance projecting that around P136 billion in government revenue would be forgone if petroleum taxes were suspended.

Economy, Planning and Development Undersecretary Rosemarie Edillon said the suspension of the excise tax on gasoline would result in a rollback of about P10 per liter, while diesel prices could fall by around P6 per liter.

Meanwhile, the President said at a Monday press conference in Malacañang that the value-added tax (VAT) on petroleum products will remain in place for now to preserve the higher revenues the government needs for its subsidy programs.

“We can’t focus only on petroleum. People are asking why only the transport workers are being helped. What about other sectors? We also need to take care of everyone’s welfare,” Marcos said.

The Palace said the government had disbursed P125.2 billion in response to economic pressures arising from the ongoing Middle East conflict.

This includes fuel subsidies, financial assistance, and logistics support for the agriculture sector, as well as cash aid and fee reductions for the transport sector.

The funds are also being used to secure oil and electricity supplies for the energy sector, as well as to support the repatriation and reintegration of overseas Filipino workers.

P43.6-B revenue loss

Finance Undersecretary Karlo Fermin Adriano said a revenue loss of P43.6 billion is projected with the suspension of the excise tax on petroleum products.

Adriano said that even if government revenues from the value-added tax reach P13 billion to P14 billion, the suspension of the excise tax on petroleum products would still result in approximately P30 billion in revenue losses.

Garin supported Adriano’s statement, comparing the incomes of individuals earning P100,000 and P1,000, saying the suspension of the excise tax would affect them in significantly different ways.