Senators are pushing to give the President the power to suspend or reduce taxes on petroleum products during periods of global oil supply disruptions caused by external shocks.

Senators Francis “Chiz” Escudero, Francis “Kiko” Pangilinan, and Loren Legarda have each filed separate bills allowing a sitting president to lower excise and value-added taxes on petroleum products when global oil prices cross certain thresholds, in order to protect consumers.

Escudero filed Senate Bill No. 1938 amid an expected spike in oil prices due to ongoing tensions in the Middle East, noting that global crude prices have sharply risen because of the US-Israel conflict with Iran. He highlighted that Brent and West Texas Intermediate (WTI) crude are trading above $90 per barrel, while Dubai crude is approaching $80 per barrel.

“These developments have driven home a hard truth: as a net importer of crude oil, the Philippines remains highly vulnerable to external oil shocks and the inflationary pressures they trigger on transportation costs, electricity rates, and the prices of basic goods,” Escudero said.

The bill includes a “flexibility clause” that allows the President to implement oil tax cuts even before the barrel price threshold is reached. 

This measure can take effect during extraordinary supply disruptions, geopolitical crises, or force majeure events, once certified by the Secretary of the Department of Energy (DOE).

Meanwhile, Pangilinan, through Senate Bill No. 1940, seeks to amend Section 148 of the National Internal Revenue Code of 1997, which currently requires the Development Budget Coordination Committee (DBCC), in consultation with the Department of Finance (DOF), to recommend excise tax suspensions.

He said giving the President ongoing authority to suspend or reduce fuel excise taxes during extraordinary situations would allow a timely response to sharp oil price fluctuations and lessen the burden on Filipino consumers.

“Such measure would support timely relief, help ease inflationary pressures, and reduce cost burdens on Filipino consumers, particularly farmers, fisherfolk, transport workers, and small businesses,” Pangilinan stated in the explanatory note of SB No. 1940.

The proposed amendment would permit the President to temporarily reduce or suspend fuel excise taxes based on DBCC recommendations and in consultation with the DOE. Pangilinan’s bill also specifies that any suspension or reduction must end once the crisis has passed.

Unlike other proposals that focus solely on suspending excise taxes, Legarda’s Senate Bill No. 1842, or the Fuel Price Relief Act, filed on March 9, establishes a Fuel Tax Stabilization Mechanism that empowers the President to suspend or reduce both excise and value-added taxes (VAT) on petroleum products—or apply a combination of both measures to arrive at the most appropriate price adjustment. This flexible approach aims to stabilize fuel costs while minimizing fiscal effects on government revenues.

“This measure is a moral imperative. We cannot allow Filipino families, farmers, fisherfolk, and public utility drivers to bear the heaviest burden of global crises. By temporarily lifting fuel taxes during extraordinary price surges, we provide swift relief and protect our people’s right to affordable necessities,” Legarda said.

The bill authorizes the President, upon recommendation of the Development Budget Coordination Committee (DBCC) and consultation with the DOE, to suspend or reduce excise and VAT taxes on regular gasoline, unleaded premium gasoline, diesel fuel oil, kerosene, and liquefied petroleum gas (LPG).

The suspension or reduction may last up to ninety days, extendable for another ninety days if conditions persist. Relief is automatically lifted once crude oil prices fall below the threshold for thirty consecutive days.

-Paraluman News