THE government should exercise fiscal discipline and interventions aimed at mitigating the impact of the Middle East war should be targeted, an International Monetary Fund (IMF) official said.
During a press briefing at the 2026 Spring Meetings in Washington D.C. on Thursday evening, the director was asked whether the Philippine government can afford to sustain its fuel subsidies and the possibility of suspending the excise tax on fuel until the end of the conflict.
“Providing targeted support is very important, and that applies in the case of the Philippines,” Asia-Pacific Director Krishna Srinivasan said in a press briefing during the IMF-World Bank Spring Meetings in Washington on Thursday.
“[W]e keep harping on the point about providing targeted support” given the multilateral lender’s prior experience, he added.
“Why do we say that? Because buffers have come down, and we don’t know how long this shock will last.”
The Marcos government, which has declared a national energy emergency, has announced subsidies for vulnerable sectors such as transport operators and drivers and farmers and fisherfolk. It has also suspended excise taxes only for cooking gas and kerosene and not diesel and gasoline.
Officials have defended the move as necessary given the fiscal deficit and as tax revenues from gasoline and diesel were needed to support social services.
The likely impact of the Middle East war has prompted the IMF to slash its 2026 Philippine growth forecast to 4.1 percent from 5.6 percent, well below the government’s 5.0- to 6.0-percent target.
Srinivasan noted that there was already weaker momentum for the economy coming into 2026 due to the massive corruption scandal that saw growth last year slump to 4.4 percent.
