Philippine economic managers oppose tax halt on diesel, petrol
Oil prices have whipsawed on daily developments in the war
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[MANILA] Philippine economic managers rejected a halt in excise taxes on diesel and petrol, saying a suspension will not likely give meaningful relief to consumers from oil price swings due to the Iran war.
“Any reduction in retail pump prices would be marginal and largely offset by prevailing market dynamics,” the Department of Finance (DOF) said in a statement on Tuesday (Apr 14), citing recommendations of the Development Budget Coordination Committee composed of several economic agencies.
The government will continue “targeted and managed subsidies” to vulnerable sectors such as transport and farm workers, the DOF said. A removal of excise taxes on kerosene and liquefied petroleum gas was announced on Monday as part of measures to curb food inflation.
The Philippines’ measured response shows how governments are balancing relief for sectors hit by higher commodity prices due to the Iran war and the need to preserve fiscal space in case of a prolonged conflict.
Oil prices have whipsawed on daily developments in the war, declining again on Tuesday on signs Washington and Teheran may revive peace talks.
President Ferdinand Marcos Jr is scheduled to meet Cabinet officials on Tuesday to discuss measures to address the war’s economic fallout.
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In March, inflation surged to a near two-year high, posing a challenge to a consumption-driven economy that slumped last year. BLOOMBERG
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