Stories that numbers tell

The government emerged as a clear winner in the oil price crunch resulting from the Middle East conflict, a victory that hardly trickled down to the poor.

War broke out in the Middle East on 28 February. Within weeks, the Strait of Hormuz, the chokepoint for nearly a fifth of the world’s oil, became a battlefield, and the Philippines, which imports 98 percent of its crude, was among those that suffered immediate pump price spikes.

Diesel crossed P130 per liter. Gasoline passed P100. Tricycle drivers who earn P500 a day watched a third of their household income vanish into a single tank. Malacañang called it a state of national energy emergency, but it failed to translate words into action.

The reason was obscene in its very nature; the Marcos government found a way to profit from a war half a world away.

On 25 March, President Ferdinand Marcos Jr. signed Republic Act 12316, granting him standby authority until 2028 to suspend or reduce excise taxes on petroleum products for up to three months at a time. Congress passed the proposal in six days.

For nearly three weeks, Marcos sat on it while diesel and gasoline prices kept climbing. When he finally acted on 14 April, he did not touch the fuels that move the economy.

He suspended the excise tax only on LPG and kerosene.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, or Republic Act 10963, gasoline carries an excise tax of P10 per liter; diesel, P5 per liter; and kerosene, P5 per liter.

He never touched the 12 percent value-added tax (VAT) at all. Since it is tacked onto the cost of fuel, collections automatically spike whenever global crude prices rise. VAT is a tax that rewards the government when war worsens.

On 13 April, defending his decision to leave VAT untouched, Marcos cited the “windfall profit,” saying it gave the government a pool of money to fund various cash distribution programs.

The Department of Finance estimated an additional P13 billion to P14 billion in VAT collections this year, even after LPG and kerosene were carved out.

An estimate of the government’s total earnings is available, as Finance Secretary Frederick Go told Congress that a full suspension of excise taxes and VAT combined would have cost the government roughly P136 billion this year.

Marcos calling the extra revenues a windfall exposed the government’s approach. It did not earn this money, did not plan for it, and has no greater moral claim to keep it since, if applied in the business world, it would be equivalent to profiteering.

Government programs supposedly funded by the windfall have been slow. The expanded Pantawid Pasada program for jeepney and tricycle drivers took weeks longer to reach beneficiaries than it should have, while ayuda distribution generally remains plagued by leakage, poor targeting and delays.

Ayuda economics is considered soft pork because the aid scheme is poorly targeted, poorly tracked and chronically late, and is often viewed as a tool to sustain patronage for those distributing the funds.

Budget watchdogs reviewing the 2026 General Appropriations Act flagged P243 billion in “shadow pork” buried inside Unprogrammed Appropriations (UA), which are triggered by exactly this kind of windfall revenue.

Layered on top of that is P600 billion in so-called hard pork, with infrastructure allocations of roughly P180 billion in Department of Public Works and Highways projects independently assessed as high-risk for overpricing or duplication.

UAs are the mechanism that the flood-control scandal exposed and are virtually beyond audit. The “Brave 18” hearings provided the backdrop on how public money was allegedly stacked in rows of suitcases, windfall or not.

When Marcos classified the VAT as a windfall, Filipinos had a good idea of what he meant.