Having carted away an estimated P1 trillion to line the pockets of allies over the past three years, the Marcos administration is now reluctant to relinquish a major revenue source that the ruling majority relies on heavily.
The fuel tax regime is widely viewed as regressive, with the burden falling disproportionately on transport workers and ordinary consumers.
Each jeepney driver, for instance, assuming they operate 300 days a year, pays P135,000 in fuel taxes, making the P5,000 one-time fuel subsidy an insult.
In 2024, the government collected P304.3 billion in oil tax revenues, or P178.5 billion from excise tax and P125.8 billion from the value-added tax (VAT). Fuel accounted for 17.5 percent of the P1.74 trillion in total excise and VAT revenues for that year.
Suspending the excise tax and VAT would cost the government about P276 billion in lost revenue, still less than the P330 billion allegedly siphoned from flood control projects over the past three years.
Think tank Ibon Foundation estimates that suspending the excise tax on fuel can add an average of P250 per month to the pockets of the poorest 14.3 million families, rising to P420 per month if the VAT on oil is also suspended.
Since the tax relief will also benefit higher-income groups, the administration should muster the will to implement complementary progressive tax measures.
Ibon suggested increasing the personal income tax on the richest families and restoring higher corporate income tax rates to 30 percent for large corporations.
The Marcos administration has lined up transport support, rice subsidies, toll discounts, OFW assistance and other types of social assistance, which look substantial but appear to be a repackaging of already existing programs.
Those most immediately and severely affected by the crisis are drivers and small operators with 1.7 million tricycles, 250,000 jeepneys, 150,000 delivery motorcycles, 45,000 motorcycle taxis and over 60,000 taxis and TNVS.
About 10 million farmers and farmworkers, and 1.2 million fisherfolk, are also affected. “Inadequate support for them will mean not just greater rural poverty but also higher food prices for the rest of the country,” an Ibon report indicated.
The Middle East hosts about 2.5 million Filipinos, whose remittances totaled about $6.48 billion last year, or 18 percent of the country’s total OFW remittance inflows.
The token programs in response to the crisis will not ensure that those with the least resources and the least capacity to absorb rising costs are protected from a crisis not of their making.
Jeepney drivers whose vehicles run on diesel, which is now the most expensive fuel at pump stations, must receive immediate relief, as they are facing income losses ranging from 10 percent to 50 percent.
Measures to head off increases in commodity prices, which are essential to protect households, are not forthcoming.
The inflation rate was 2.4 percent in February and will likely double to at least 5 percent if global oil prices remain above $100 per barrel. The market is betting on a 7.5 percent or greater upsurge to $140 to $150 per barrel.
Price controls on basic goods, including socially sensitive oil products like diesel, gasoline, kerosene and LPG, should be considered, according to Ibon.
Still, removing VAT and excise taxes would provide immediate relief to the largest number of Filipinos, particularly impoverished and middle-class households whose spending is largely concentrated on basic needs.
For once, the priority should be protecting the public’s welfare while setting aside political expediency.