President Duterte’s economic managers approved the grant of fuel subsidies, giving public transportation sector the much-needed relief from skyrocketing pump prices.
The inter-agency Development Budget Coordination Committee (DBCC) announced Monday, Oct. 25, that the government will shell-out P1 billion in fuel subsidy to 178,000 bonafide public utility vehicle (PUV) drivers.
The DBCC, which the Department of Budget and Management chairs, said the P1 billion fuel aid is a short-term scheme to cushion PUV drivers from high pump prices.
According to the DBCC, the fuel assistance, administered by to Land Transportation Franchising and Regulatory Board (LTFRB), will be released to public transport for the remaining months of 2021.
“We, the members of the Development Budget Coordination Committee, are committed to support our transportation sector, amidst the increasing oil prices,” the inter-agency body said.
“This will be distributed using the system established under the Pantawid Pasada Program of the LTFRB,” the DBCC added.
The funds are charged against the 2021 unprogrammed appropriations under the support for infrastructure projects and social programs, the DBCC said.
Local pump prices have skyrocketed in recent weeks, fuelling calls for a fare hike for jeepneys and the suspension of excise tax on petroleum.
As global prices for crude hit record highs, gasoline prices domestically had climbed by P19.65 per liter since the start of the year, while diesel rose by P18 per liter and kerosene by P15.49 per liter.
On Monday, oil companies announced another oil price hikes, marking the 9th round in an unbroken string of price upticks that started in August.
Last week, Energy Secretary Alfonso G. Cusi suggested the suspension of excise tax on petroleum. However, the Department of Finance has advised caution as it will incur substantial revenue losses for the government.
Finance Undersecretary Antonette C. Tionko said the proposed suspension of fuel taxes would result in P10.95 billion in foregone revenue per month.
“Any suspension of the imposition of excise taxes should be appropriately studied as the revenue to be foregone is substantial and may affect the government’s budget for COVID-19 recovery measures,” said Tionko in her memorandum dated Oct. 20, 2021.
If excise tax on fuel is suspended, the Department of Energy (DOE) estimated that it will lower pump prices by around P8 to P10 per liter. However, the DOF warned that it will cost the government about P131.4 billion in forgone revenues for 2022.