BUSINESS groups want the government to suspend fuel taxes — a move rejected by Malacañang — as a surge in pump prices has driven up production, transportation, and logistics costs.
“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,” Philippine Exporters Confederation Inc. (Philexport) President Sergio Ortiz-Luis Jr. said in a statement.
He noted that suspending the value-added tax (VAT) on fuel would help temper costs, enabling enterprises — particularly the micro, small and medium enterprises (MSMEs) that make up the bulk of Philippine business — to sustain operations, preserve jobs, and remain competitive.
Ortiz-Luis said he supported a Senate bill authorizing the suspension or reduction of the VAT on fuel, calling it "timely and pragmatic."
While he acknowledged concerns over foregone revenues — estimated by the Finance Department to reach P136 billion from both excise tax and VAT — Ortiz-Luis said the broader economic benefits, including sustained business activity, preserved jobs, and stronger consumer demand, would offset the impact over time.
“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,” the Philexport chief said.
The Philippine Chamber of Commerce and Industry (PCCI) also supports the suspension of excise taxes and value-added tax on fuel and David Chua, chairman of the organization's power and energy committee, submitted a paper stating so during a House of Representatives joint committee hearing on Wednesday.
The business group, in a statement, said “the multiplier effect of reduced operational costs for industries, and especially the micro, small, and medium enterprises, and the stabilization of consumer prices far outweighs the immediate loss in tax revenue.”
It proposed the following:
– Activate Republic Act 12316, which gave President Ferdinand Marcos Jr. emergency powers to suspend taxes on petroleum products, and implement a VAT holiday for fuel for a fixed period to provide an additional layer of relief;
– Earmark 2026 Malampaya royalties to serve as a bridge for the national budget during the tax relief period;
– Intensify a crackdown on fuel smuggling and corruption;
– Offer enhanced fiscal terms for drilling programs and legislate legal protection for energy projects, shielding them from LGU and third-party interventions;
– Mandate that all Energy department-approved service contracts be automatically granted green lane status to fast-track the issuance of permits; and
– Ensure that tax savings are complemented by streamlined fuel vouchers for the transport and agricultural sectors to ensure pass-through benefits.
"Government must prioritize the productivity of the private sector as the primary engine of recovery,” the PCCI said.
“While the projected P136 billion revenue loss for 2026 is a serious concern, a stagnant economy characterized by shuttered businesses and weakened consumer demand would be far more costly in the long run," it added.
Marcos only suspended the excise tax on kerosene and liquefied petroleum gas and Malacañang has said his emergency powers did not apply to VAT. Finance department officials have also said that VAT revenues were needed to fund aid for sectors hit hard by the energy crisis.
