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The Philippine Exporters Confederation Inc. reiterated its support for a proposed suspension of the value-added tax on fuel, citing its potential to ease cost pressures on businesses and consumers amid elevated prices
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High fuel prices are squeezing production, transportation, and logistics costs, hurting Philippine export competitiveness, says PHILEXPORT president Sergio Ortiz-Luis Jr.
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The proposal backs Senator Loren Legarda’s legislative measure for a temporary VAT suspension on fuel products
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Projected fuel price reductions: up to P6/liter for diesel and P10/L for gasoline under a tax suspension
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Past suspension measures already cut kerosene by P5.60/L and LPG by P3.36/kilogram (roughly P37 per 12-kg tank)
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Inflation could be contained to 3.6%-4.2% with the suspension, versus a potential spike to 7.5% without it
The Philippine Exporters Confederation Inc. (PHILEXPORT) reiterated its support for a proposed suspension of the value-added tax (VAT) on fuel, citing its potential to ease cost pressures on businesses and consumers amid elevated prices.
PHILEXPORT president Sergio Ortiz-Luis Jr. renewed the industry group’s call for the tax relief, citing sustained upward pressure on production, transportation, and logistics costs that he said is steadily undermining the viability of Philippine exporters in both domestic and international markets.
“Fuel is a fundamental input across industries. Reducing the tax burden on fuel will have a cascading positive effect, lowering operational expenses and ultimately stabilizing prices of goods and services,” Ortiz-Luis said in a press release.
The confederation supports a legislative proposal led by Senator Loren Legarda to temporarily suspend VAT on fuel products. Ortiz-Luis described the bill as a timely and practical response to mounting economic pressures, particularly its potential to blunt inflationary pressures hitting micro, small, and medium enterprises (MSMEs) hardest.
Government and economic data cited by PHILEXPORT paint a concrete picture of the measure’s potential impact. A VAT suspension could reduce pump prices by as much as P6 per liter for diesel and P10 per liter for gasoline, generating significant savings for transport, logistics, and export operators. Earlier tax suspension measures have already demonstrated the direct consumer benefit of such interventions, trimming kerosene prices by around P5.60 per liter and LPG by roughly P3.36 per kilogram, equivalent to about P37 per household tank.
READ: LPG, kerosene excise tax lifted; gov’t eyes cut in duties for imported agri goods
On the macroeconomic front, economic managers project that suspending fuel taxes could hold inflation within a 3.6% to 4.2% range. Without intervention, inflation could spike to 7.5%, an outcome Ortiz-Luis said would disproportionately burden low- and middle-income households as higher transport costs filter through to the prices of food and medicine.
While recognizing concerns about lost revenues, estimated at P136 billion by the Department of Finance from combined excise taxes and VAT, he stated that the broader economic advantages could compensate for the fiscal decline in the long run.
“Targeted, time-bound relief measures such as the suspension of VAT on fuel are critical to safeguarding economic momentum, supporting exporters, and protecting Filipino consumers from further price shocks,” Ortiz-Luis said.
He urged policymakers to act swiftly on the proposal while balancing fiscal sustainability with the need to sustain economic growth and resilience.
