Relief from diesel, gasoline excise tax suspension to be limited, economic managers say

By Justine Irish DP. Tabile, Senior Reporter

SUSPENDING excise taxes on diesel and gasoline would only provide limited relief compared to lifting levies on liquefied petroleum gas (LPG) and kerosene as the resulting decline in pump prices would be small, the Department of Finance said.

“The Development Budget Coordination Committee (DBCC) has determined that suspending excise taxes on diesel and gasoline would not likely provide meaningful relief, as any reduction in retail pump prices would be marginal and largely offset by prevailing market dynamics,” Finance Secretary Frederick D. Go said in a statement on Tuesday.

In contrast, suspending the excise taxes on kerosene and LPG would directly ease the burden on Filipino families and small businesses by helping them meet basic energy needs, he said.

On Monday, President Ferdinand R. Marcos, Jr. approved the suspension of excise taxes on LPG and kerosene while keeping levies on gasoline and diesel unchanged.

“This relief is focused on the most vulnerable,” said Mr. Go, citing savings of around P36.96 per 11-kg cylinder for LPG and P5.56 per liter of kerosene due to the suspension.

The Philippine Statistics Authority’s 2023 Family Income and Expenditure Survey showed that 48% of total kerosene consumption is attributed to the bottom 30% of households, while 55.7% of LPG users come from the bottom 70%.

“This means the benefits extend beyond the poorest households to also support middle-income families. For these families, every peso saved on fuel costs means more resources for food, education, and healthcare,” he added.

Meanwhile, the government will continue to provide additional targeted and managed subsidies for the most vulnerable sectors, including public transit operators and drivers, commuters, and farmers and fisherfolk, the Finance chief said.

“This measured and targeted response is designed to deliver immediate relief, ensuring that support reaches those who need it most, while preserving fiscal space to sustain essential public services and respond to an unpredictable global environment,” he said.

“The DBCC will continue to closely monitor global oil market developments and stands ready to adjust its policy response as needed.”

The Philippines is under a one-year state of national energy emergency, giving the government expanded powers to secure fuel supplies and shield the economy from rising oil prices amid the war in the Middle East.