The Department of Finance (DOF) is looking at a Php20.3 billion “war chest” that the national government could use for fuel subsidies to critical sectors, including public utility vehicles, farmers, and fishermen, should global crude prices remain at the $100 per barrel mark.
At a Senate hearing on Monday, Finance Asec. Valery Joy Brion said that the additional subsidies can be taken from the excess value-added tax (VAT) collection, citing that the government was able to collect Php3 billion from January to February alone. The excess VAT collection, she pointed out, can be used for subsidies should oil prices continue to spike in the next weeks or months.
Sen. Sherwin Gatchalian, chairman of the Senate Committee on Energy, affirmed the need for the “war chest” given the uncertainty of the conflict between Russia and Ukraine.
As of Tuesday morning Manila time, Dubai crude oil prices stood at $113 per barrel.
Brion added that the government also collected Php143 billion from fuel excise taxes in 2021. The DOF had rejected the proposal of suspending the said tax. Instead, it will be recalibrating the grant of subsidies to the marginalized sectors.
The government recently doubled the budget for the Pantawid Pasada program to Php 5 billion.
Brion said that overall subsidies have increased from Php3 billion to Php 6.1 billion, adding that more subsidy programs are being studied from the additional VAT collections.
Meanwhile, Gatchalian has asked the Department of Energy (DOE) to strengthen its monitoring program on companies imposing exaggerated pump prices in their fuel products.
“The DOE should make sure that oil companies and retailers are not abusing the situation,” the re-electionist senator said in a statement.
Locally, pump prices have gone up on Tuesday by Php13.15 per liter for diesel, Php7.10/liter for gasoline, and Php10.50/liter for kerosene. DOE Oil Industry Management Bureau Dir. Rino Abad confirmed in an interview on Radyo5 on Tuesday morning that this is the biggest oil price increase in the country’s history.