Full Breakdown
Philippines Considers Emergency Powers for Fuel Tax Suspension Amid Rising Oil Prices
3/9/2026, 10:33:52 PM
Legislative Proposal for Tax Suspension
In response to escalating fuel prices driven by geopolitical tensions in the Middle East, Speaker Faustino “Bojie” Dy III and Majority Leader Ferdinand Alexander “Sandro” Marcos have introduced House Bill No. 8292. This bill seeks to empower President Ferdinand Marcos Jr. to suspend excise taxes on fuel products during national or global emergencies. The proposed legislation aims to amend Section 148 of the National Internal Revenue Code, allowing the president to suspend the current excise tax rates of P6 per liter for diesel and P10 per liter for gasoline under specific conditions.
The suspension could be enacted if the average Dubai crude oil price exceeds $80 per barrel for three consecutive months or if a state of national emergency is declared, resulting in extraordinary increases in domestic fuel prices. The suspension would be effective for up to six months, with a maximum total suspension period of one calendar year.
Economic Implications and Concerns
The urgency of this proposal is underscored by predictions from the Department of Economy, Planning, and Development (DEPDev), which estimates that diesel prices could soar to P96 per liter if the conflict in the Middle East continues. Conversely, suspending the excise tax could lower prices to approximately P90.04 per liter. For gasoline, prices could rise to P70.20 per liter but may decrease to P59 per liter with the tax suspension.
However, the Department of Finance has cautioned that removing the excise tax could lead to a revenue loss of P136 billion by 2026, primarily due to reduced excise tax and value-added tax (VAT) collections. Finance Undersecretary Karlo Fermin Adriano noted that every peso removed from the excise tax on diesel could result in a revenue loss of P9 billion to P10 billion, while a similar reduction for gasoline could lead to losses of P5 billion to P6 billion.
Official Statements and Legislative Support
Senate leaders, including Senate President Vicente Sotto III, have indicated that they will prioritize proposals granting President Marcos emergency powers to address the oil supply crisis. Sotto expressed confidence that the Senate could expedite the legislative process before its upcoming recess. He emphasized the necessity of these measures to alleviate the financial burden on Filipinos facing rising oil prices.
In a unified call for action, the Trade Union Congress of the Philippines (TUCP) has urged the president to certify the urgency of House Bill No. 6740, which seeks to eliminate the 12 percent VAT on electricity, further highlighting the interconnectedness of rising fuel and electricity costs.
Criticism and Opposition
While the proposed measures aim to provide immediate relief, critics have raised concerns about the long-term implications of suspending excise taxes. The Department of Finance's warnings about significant revenue losses have sparked debate about the sustainability of such fiscal policies. Additionally, some analysts caution that the ongoing conflict in the Middle East could lead to further volatility in oil prices, complicating the economic landscape.
What's Next
As discussions continue in both the House of Representatives and the Senate, the urgency of addressing rising fuel prices remains a priority for lawmakers. The proposed bills will undergo the necessary readings and deliberations, with the potential for expedited passage to provide timely relief to affected sectors.
