SEN. Sherwin Gatchalian renewed Wednesday his call for a suspension of the diesel excise tax, citing the need to cushion vulnerable sectors from the impact of rising fuel prices due to the war in the Middle East.
Inflation reached a three-year high of 7.2 percent in April.
Gatchalian warned that accelerating inflation continues to erode household purchasing power, with low-income families bearing the brunt of rising prices. He noted that poorer households allocate a larger share of their income to essential goods such as food, transportation and utilities, making them more susceptible to economic shocks.
”The purchasing power of our poor countrymen is being severely reduced due to the high cost of goods. Instead of letting inflation spiral even further, it is time to remove the excise tax on diesel,” Gatchalian said.
The senator described diesel as the “fuel of the masses,” emphasizing its critical role in powering public utility vehicles, agricultural operations, and the transport of food and other basic commodities. Any increase in diesel prices, he said, directly affects transport fares and the overall cost of goods.
The excise tax on petroleum products was implemented under the Tax Reform for Acceleration and Inclusion Law, which sought to generate revenue for infrastructure and social services but has drawn criticism during periods of high global oil prices and inflation.
Gatchalian reiterated the need for longer-term solutions, including the institutionalization of an automatic, inflation-triggered support mechanism for social assistance programs. The proposal aims to provide immediate and targeted financial aid to vulnerable households whenever inflation breaches a certain threshold.
The initiative forms part of the recommendations of the Senate PROTECT ad hoc panel, which Gatchalian chairs. The panel has been studying measures to mitigate the effects of rising fuel prices and inflation on consumers and key sectors.
Economic managers have previously weighed the potential revenue losses from suspending fuel excise taxes against the need to provide relief, with concerns that such a move could impact funding for government programs. However, Gatchalian maintained that immediate intervention is necessary to protect the most affected sectors.
”As inflation rises, we must act decisively to shield those who are least able to cope,” he said.
The Department of Finance and other economic agencies have yet to issue a formal response to the renewed call.
