Marcos weighs fuel tax cut as oil price shock mounts

By Chloe Mari A. Hufana, Reporter and Kaela Patricia B. Gabriel

PRESIDENT Ferdinand R. Marcos, Jr. may decide on Tuesday whether to use his emergency powers to suspend or cut excise taxes on petroleum products, as economic managers submit recommendations aimed at easing the impact of surging oil prices driven by the escalating Middle East war.

The Development Budget Coordination Committee is scheduled to present its assessment to the President on April 7, Palace officials said, raising the possibility of fiscal intervention just weeks after Congress authorized such powers.

“The recommendation will be submitted [to the President], and there will probably be a decision if he finds it correct and appropriate for our people and the country,” Palace Press Officer Clarissa A. Castro told a news briefing on Monday. She declined to provide details on the committee’s proposal.

The Philippines, which imports almost all of its fuel, remains under a year‑long state of energy emergency as conflict involving Iran threatens global supply routes and pushes crude prices higher.

Oil prices have climbed steadily since late February, with the latest adjustment set to push domestic diesel prices toward P170 per liter.

Under the emergency declaration, Mr. Marcos also created the inter‑agency Unified Package for Livelihoods, Industry, Food and Transport (UPLIFT) Committee to coordinate the government’s response. The body is scheduled to meet on April 7, though the Palace has not disclosed its agenda.

Congress last month granted Mr. Marcos the authority to suspend or reduce excise taxes on petroleum products after he signed Republic Act No. 12316 on March 25. The law allows tax relief during periods of severe price volatility but stops short of mandating action.

Ms. Castro said fiscal trade‑offs remain a key consideration. Taxes are the lifeblood of the government, she said, underscoring the need to balance price relief with revenue stability.

Finance officials have warned of the cost. Finance Undersecretary Karlo Fermin S. Adriano told lawmakers that suspending excise taxes could cost the government as much as P136 billion this year, including P121.4 billion in foregone excise revenues and P14.6 billion from lower value‑added tax collections.

DIPLOMACY, SUPPLY RISKS
The Palace sought to play down diplomatic fallout from Iran’s assurance of safe passage for Philippine‑flagged vessels through the Strait of Hormuz, a critical waterway that carries about a fifth of the world’s oil supply.

Ms. Castro, citing Foreign Affairs Secretary Ma. Theresa P. Lazaro, said Manila does not expect the arrangement to affect ties with the US, a long‑time ally.

“We don’t see any issues with our ally, the US, because they are aware of the current situation,” Ms. Castro said, comparing the arrangement to the Philippines’ continued oil imports from Russia despite strained US‑Moscow relations.

Ms. Lazaro spoke last week with Iranian Foreign Minister Abbas Araghchi, who assured the “safe, unhindered and expeditious passage” of Philippine‑flagged vessels and Filipino seafarers. Iran restricted access to the Strait after US and Israeli strikes against Tehran on Feb. 28.

US President Donald J. Trump warned Iran this week to reopen the Strait or face further consequences, raising fears of additional escalation.

Energy Secretary Sharon S. Garin has said Iran’s guarantee does not translate into immediate price relief, as global benchmarks continue to price in supply risk. Manila has instead pursued alternative fuel sources, including shipments from Russia, Japan and South Korea. Mr. Marcos said earlier that negotiations with nontraditional suppliers have been positive.

The oil shock has amplified economic pressures at home. Higher pump prices threaten to lift inflation, while the peso hit a record low against the dollar last month, reflecting capital outflows and import‑driven demand for foreign currency.

PUSH TO REGULATE PRICES
Amid the volatility, a senator on Monday filed a bill that would reverse decades‑old fuel deregulation by granting the President broader powers to intervene in oil pricing during national emergencies.

Senate Bill No. 2020 or the Bayanihan 3: Power to the People Act, filed by Senator Lorna Regina B. Legarda, will allow the Energy, Finance and Trade departments and the Philippine Competition Commission to temporarily regulate the oil industry during an energy emergency.

“By granting the President emergency powers to stabilize fuel prices, the state is preemptively defending against the weaponization of scarcity,” Ms. Legarda said in the bill’s explanatory note.

The proposal allows temporary price controls, reallocation of fuel supply and mandatory minimum strategic stockpiles. It also directs the Finance department to defer, suspend or reduce excise taxes on gasoline, diesel, kerosene and liquefied petroleum gas.

The bill seeks to institutionalize the UPLIFT framework and expand financial relief for transport, agriculture and fishery workers. Ms. Legarda proposed a P230‑billion funding package taken from unreleased appropriations, the 2026 budget and the Malampaya Fund.

The emergency powers will take effect for six months upon enactment or until global crude prices fall below $80 a barrel. Dubai crude has surged to as high as $153 in recent weeks.

The Palace will review the bill, Ms. Castro said, adding that the President is open to certifying fuel‑related measures as urgent.