House economists wary of fuel tax suspension

House economists, including Rep. Joey Salceda and Rep. Stella Quimbo, expressed caution regarding the proposed suspension of fuel excise taxes due to potential impacts on fiscal credibility.

Salceda emphasized the need to exhaust other measures before considering tax adjustments, stating that taxes are crucial for state funding.

He previously proposed a flexible excise tax adjustment mechanism that would lower taxes when oil prices exceed $80 per barrel for three months and increase them if prices fall below $45.

This mechanism would use excess revenues from low-price periods to fund fuel subsidies during high-price periods.

To directly assist consumers, Salceda suggested providing fuel discounts for farmers, fisherfolk, and the transport sector, utilizing P9 billion in excess VAT revenues.

Additionally, he proposed reducing the bioethanol requirement in gasoline from 10% to 5%, which could lower prices by P3.1 per liter.