Even as the reported arrest of fugitive lawmaker Zaldy Co serves as a timely diversion to ease public sentiment, a widening disconnect between the country’s leaders and the broader populace is becoming increasingly evident.
A perception of inadequacy has taken hold, fueled by what many see as a faltering government response to the economic crisis.
With the strain on the economy from the Gulf crisis expected to persist, the urgency of the situation appears to be lost on Palace officials.
Soaring fuel prices and the inevitable surge in the cost of food, transport and other commodities and services are hammering Filipino households.
Yet, instead of the decisive action demanded by transport workers and millions of ordinary Filipinos, the administration chose the path of least resistance with the cosmetic suspension of the excise tax on liquefied petroleum gas (LPG) and kerosene.
The tokenistic move was meant to show the government is doing something while avoiding the deeper tax cuts that would actually matter.
The numbers from the independent think tank, IBON Foundation, are damning. Of the poorest 14 million families — those who had described themselves as poor even before the latest oil shock — only 7.1 million, or barely 51 percent, are LPG users.
That leaves 6.8 million families, nearly half of the country’s most vulnerable, with zero benefit.
Even those who use LPG will see absurdly small savings. These households buy just four to six 11-kilogram tanks a year. The excise tax suspension yields negligible savings of P13 to P18 per month, even if kept in place for a full year.
The ripple effect on the prices of other goods is limited, perhaps to the occasional carinderia meal.
The cut to kerosene is even more laughable, as fewer than a million of the poorest 14 million families use it.
Contrast this with the effect of a slash or suspension of the excise tax on the most commonly used oil products.
Among the same poorest 14 million families, 7.5 million use gasoline and more than 400,000 use diesel. They are mostly taxi and jeepney drivers.
Suspending the excise tax on all oil products would deliver direct monthly savings of P37 to P70 for most people, several times more meaningful than the LPG crumbs.
Far more important are the indirect benefits: cheaper fuel translates to lower prices for food, public transport and utilities.
IBON estimated that the poorest 14 million families could save P450 to P550 per month, a real, recurring relief that could ease the social distress gripping hundreds of thousands of households and threatening millions more as poverty spreads.
Executive Secretary Ralph Recto’s favorite excuse that the top 30 percent of households consume 85 percent of diesel deliberately obscures reality.
It ignores the 3.4 million trucks, trailers, buses and utility vehicles that move the nation’s goods and people.
These vehicles consume diesel at a scale that dwarfs the 1.1 million SUVs owned by the affluent.
Cheaper diesel does not merely pad the pockets of the rich; it lowers the cost of hauling rice, vegetables and fish to every wet market and sari-sari store, Ibon’s study indicated.
What the public sees is a failure of political will. The visible pain should outweigh any hand-wringing about revenue losses or credit-rating jitters.
A deeper fuel tax relief would benefit not only the poorest but also the more than 12 million middle-class families now squeezed by high fuel prices.
The administration’s reluctance to act boldly is matched only by its diffidence in raising the right revenues.
A windfall tax on corporate profits, including those of oil companies cashing in on the crisis, higher taxes on luxury goods and other temporary revenue-generating measures are not even being discussed despite President Ferdinand Marcos Jr. being cloaked in emergency powers. Higher corporate income taxes and rates on high-income families would allow the government to fund urgent social interventions without punishing the very people least able to cope.
The economic fallout from the Middle East conflict is real and deepening. Token steps on LPG and kerosene are half-measures backed by fiscal excuses that only serve to induce widespread pain into anger.